Preamble

The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Bradford Corporation Bill (by Order),

Second Beading deferred till Thursday next, at a quarter past Eight of the Clock.

Greenock Burgh Extension, &c, Bill (by Order),

Second Reading deferred till Tuesday next.

Newcastle-upon-Tyne Corporation Bill (by Order),

Second Reading deferred till Thursday next, at a quarter past Eight of the Clock.

West Bromwich Corporation Bill (by Order),

Read a Second time, and committed.

BUXTON CORPORATION BILL (BY ORDER).

Read a Second time, and committed.

Mr. H. WILLIAMS: I beg to move,
That it be an Instruction to the Committee on the Bill that they shall have regard to the provisions of Section 56 of The Public Health Act, 1925, so far as Clause 14, sub-clause (2), is concerned.

Dr. VERNON DAVIES: I beg to second the Motion.

Lieut.-Commander KENWORTHY: May I ask, Mr. Speaker, whether it is in older to ask for some explanation on this matter—whether this question is debate-able I If so, I think that, before the hon. Member for Reading (Mr. H. Williams) is allowed to "get away with" this Instruction, if I may so phrase it, some of the other distinguished Conservative Members whose names are attached to this Motion should—the hon. Member himself having now exhausted his right to speak—give us some explanation. Otherwise, I myself propose to vote against such an irregular procedure, and I hope the House will support me, not in
order to serve any particular interest or anything else, but to serve the far more important matter of the correct procedure of this House where Private Bills are concerned.

Dr. DAVIES: Perhaps I may be allowed to say that this Motion has the approval of the promoters of the Bill. Its purpose is to limit the amount of money which a municipality may be allowed to spend upon theatrical performances or entertainments. According to the Public Health Act, they are restricted in that direction, and the promoters of the Bill are quite prepared to accept this Instruction.

Mr. THURTLE: It seems to me that that explanation makes it more undesirable than ever. I think the municipality ought to be free to decide for itself how much it is going to expend upon matters of that kind. It may be very desirable, in the interests of the well-being of the residents in that particular municipality, that there should be public entertainments of an educative and recreational character, and I certainly think that the Corporation itself should be the proper judge of that. I hope that, if this Instruction is going to be pressed, the House will force it to a Division.

Mr. SPEAKER: Opposed Private Business cannot be taken on Friday. The Motion must stand over.

BUSINESS OF THE HOUSE.

Mr. RAMSAY MacDONALD: May I ask the Parliamentary Secretary to the Treasury to tell us what business he proposes to take on Tuesday and Wednesday?

The PARLIAMENTARY SECRETARY to the TREASURY (Commander Eyres Monsell): On Tuesday, until 8.15, the remaining stages of the Poor Law Emergency Provisions (Scotland) Bill and of the Public Works Loans Bill; the Second Reading of the Land Tax Commissioners Bill and of the Police (Appeals) Bill: and, if time permit, other Orders on the Paper.
On Wednesday, until 8.15, the Second Reading of the Forestry Bill and of the Government of India (Indian Navy) Bill; and. if time permit, other Orders on the Paper.

Mr. MacDONALD: May I ask a question of you, Mr. Speaker, or perhaps you would prefer that I should put it on Monday, in ease you have not had an opportunity of considering it? It is whether you have made up your mind as to the scope of the Debate on Thursday, when I understand that, on the Vote on Account, the question of disarmament is going to be raised; and whether it is your intention to allow a wide scope in that Debate, or to limit it strictly within the usual rules of debate on such an occasion?

Mr. SPEAKER: That question has been put to me privately, and I gave the reply that it would be open to hon. Members to raise the whole question of the proceedings at Geneva, and also the proposal for a conference from Washington. It would not be in order to go into close details of reduction of armaments on the several Services, but the broad question of the Government's general policy, undoubtedly can be raised.

PERSONAL EXPLANATION.

Sir ALFRED BUTT: With your permission, Mr. Speaker, I desire to make a short personal explanation to you and to the House. On the 31st March, 1925, on the occasion of the Motion for the Second Reading of the British Empire Exhibition (Guarantee) Bill, I felt it my duty to make certain grave charges against two gentlemen, Mr. Laycock and Mr. Bird. I did so solely because at that time I believed them to be true and to he in the public interest. Since that occasion, those charges have been the subject of very full investigation in the High Court of Justice, with the result that Messrs. Laycock and Bird have been completely vindicated. It is my duty to you, Sir, and to the House, and also my pleasure, to say that I accept unreservedly the findings of the learned Judges who investigated those charges, and I withdraw without reserve any imputation that I may have made. I felt it was right that, in the first instance, I should make this statement on the Floor of this House, before formally communicating with Messrs Laycock and Bird. I am happy to say that those Gentlemen appreciate my desire in this connection, and
accept my withdrawal in the same large spirit in which it is made.

BILLS PRESENTED.

GOVERNMENT OF INDIAN (INDIAN NAVY) BILL,

"to amend the Government of India Act with a view to facilitating the provision of an Indian Navy, and to make consequential amendments in the Naval Discipline Act," presented by Earl WINTER-TON; supported by Mr. Bridgeman; to be read a Second time upon Monday next, and to be printed. [Bill 55.]

FORESTRY BILL.

"to authorise an increase of the number of Forestry Commissioners; to empower the Commissioners to make bye-laws with respect to lands vested in them or under their management or control; and for purposes consequential upon the matters aforesaid," presented by Mr. McNEILL; to be read a Second time upon Monday next, and to be printed. [Bill 56.]

ARMY (SUPPLEMENTARY. ESTIMATE), 1926.

Estimate presented, of the further Amount which will be required during the year ending 31st March, 1927, to meet. Expenditure not provided for in the Army Estimates of the year [by Command]; Referred to the Committee of Supply, and to he printed. [No. 28.]

Orders of the Day — AUCTIONS (BIDDING AGREEMENTS) BILL.

Order for Second Reading read.

Lord FERMOY: I beg to move, "That the Bill be now read a Second time."
This Bill is aimed at preventing rings and knock-outs. Rings are composed of dealers who bid for articles at auctions and obtain them at a lower price than their value, and then divide the profits among themselves. The knock-out is the subsequent auction of the article which has been obtained by the ring. The pro-motors of this Bill believe that the House, in according it a Second Reading, will be taking a step towards protecting the public against fraud, and they also believe that it will be of the greatest benefit to agriculture. Since I gave notice of this Bill, I have received a great many letters from the public. Every one condemns rings and knockouts. Every one says how difficult it is to put things up at auction without getting into the hands of these rings, who do all they can to conspire against and defeat those who are trying to sell their goods.
Agriculturists have an even stronger case. Unquestionably, the farmer is very much hit by rings. He brings his stock to market when they are in the prime of their condition, but, unlike other sellers, he is not able to put a reserve upon them, and is unable to bring them hack to the farm, because he has used up all the available feeding products; and for that reason the farmer, particularly, is hit by the rings. I have also received two other letters which I should like to read to the House. One is from the Secretary of the Auctioneers and Estate Agents Institute of the -United Kingdom. He says:
I think I may say without the slightest hesitation that the principle underlying the proposed Bill is one which will have the whole-hearted support of all reputable members of the auctioneering profession, but I thought I would take the liberty of drawing your attention to the reason, namely, the difficulty of proof, which has always debarred the Council of this Institute from promoting such legislation. Possibly Parliament may see some way around this difficulty.
The other letter is from the Secretary of the Incorporated Society of Auctioneers and Landed Property Agents. He writes approving of the introduction of this Bill, and he says:
To the above suggestions I would add that the society strongly approves of your efforts to do away with these 'knock-outs' and 'rings,' which are alike harmful to producer and consumer.
I have also had several letters from dealers who are wholeheartedly condemning the rings. This Bill was introduced by a very distinguished judge in another place. It received a Second Reading and only failed to pass for lack of time. As it stands, the law does not regard these agreements as illegal. The Bill provides in Clause 1 that
Any agreement made with reference to a sale by auction not to bid at the sale in Competition with any other person with intent that the property offered for sale shall be afterwards acquired by the persons making the agreement, or some or one of them, from the purchaser of the property at the sale shall he a criminal offence.
It goes on to provide that
Any sale at an auction with respect to which any such agreement as aforesaid has been made may be treated as fraudulent by the vendors or their agent, as against a purchaser who has been a party to such agreement. Any person who is a party to such an agreement shall be liable on summary conviction to a fine not exceeding £100 or to a term of imprisonment with or without hard labour for any period not exceeding six months or to both such fine and such imprisonment.
I believe there are very few Members of the House who can oppose such a Bill There is no question that the conduct of auctions requires investigation and legislation. I am sorry to say the Bill does not include such things as mock auctions. The object of the Bill is to make what has been considered legal for some 80 years illegal, and I hope, after discussion upstairs, we may be able to have a Bill which will have a very strong moral effect upon auctions.

Sir DOUGLAS NEWTON: I beg to second the Motion.
In moving the Second Reading of a Bill there are certain considerations which the House always likes to see taken into account Firstly, it desires to be assured that there is a grievance and a need for legislation to deal with it, and, secondly, it wishes to feel that the proposals submitted to it may reasonably
be expected to do something to meet the grievance. I believe there is not a great deal of official information in regard to rings in Whitehall, but the reason is that anyone who feels aggrieved at an auction feels that it is quite useless for him to put pen to paper and send it in writing to an official Department. In spite of any paucity of official information that there may be, I have reason to believe that there are rings at a great many auction marts. After all the War tended to increase and extend group buying. It tended to promote associated action and the increase in rings is undoubtedly to some extent the heritage of control and has led to what might fitly perhaps be described as somewhat unfair yearnings for other people's earnings. The question that is dealt with in this Bill was raised by a very distinguished member of the Bench, Lord Darling, in another place, and the Bill he promoted passed through all its stages and was referred to a Select Committee. When a Bill is referred to a Select Committee it thereby receives a meticulous examination, for a Select Committee has power to examine witnesses under oath, and the fact that the Bill subsequently passed through the other House is a strong point in its favour. One of the witnesses before that Committee, Mr. Ernest House, Chairman of the Incorporated Society of Auctioneers, on 24th November last said
The knock-out is regularly resorted to by various classes of dealers and most auctioneers are unable to cope with it. The proposed Act will considerably reduce the activities of the ordinary knock-out.
I will give the House an illustration of a knock-out in its simplest form, because there are various elaborations of the knock-out. Four or five men may agree together that only one of them is to hid for an article. The article is acquired at the public auction, let is say for £20. The parties to the agreement then repair to another place and proceed to have another little auction amongst themselves from which the public are excluded. Let it be assumed that the article is subsequently resold for £30 in the closed auction. The difference between £20 and £30 is then distributed amongst the parties to the agreement. In that way, as the law stands, although the vendor
and the public are both thereby aggrieved yet there is nothing illegal in the action of these people.
From time to time cases have b en taken to the law courts in order that the legal position of parties participating in knock-outs of this kind might be made clear, and as recently as 1920 a case arose in connection with the sale of Government property. The case I would draw attention to is that of Rawlings v. The General Trading Co. The plaintiff and defendant entered into an agreement not to bid against each other at a public auction and to share any profits that might arise out of the transaction. The evidence given during the hearing of the case showed clearly that the result of this combination was that goods that belonged to the Government were sold much below the price they would otherwise has e realised. After the sale the defendant repudiated the agreement, and the plaintiff claimed damages for loss of profit arising out of the repudiation. In the lower court it was held that the agreement was not in the public interest and was against public policy and for that reason it was held that it was not enforceable. As the result of an appeal, the Court, by a majority, allowed it on the ground that the law in regard to the matter of agreements of this nature as well established. In dissenting, however, from that view, it is right to say that Lord Justice Scrutton stated that the effect of such an agreement upon the public was to restrain free competition at auctions and that the property of any member of the public might be sold by reason of a combination of this kind under its true value. Such agreements he said deprived the public of the advantage of free competition. I will cite one more instance, the case of Cohen v. Roche, which was heard in June of last year. In that case, 8 Hepplewhite chairs were sold at auction for When the vendor realised that these chairs had been sold to a ring, he took exception to the sale and refused to give delivery of the chairs. Action was brought against him and damages claimed for retention of the property. Mr. Justice McCardie, in giving judgment, said:
Although there was ample evidence that there was a knock-out in regard to this lot, it was clear in law that that in itself afforded no answer to the action.
In that way, his judgment supported the previous judgment which had recently been given in the Disposal Board case.
Those of us who support this Bill take the view that it is time that action was taken. We hold that combinations and rings of that kind are not in the public interest, and that where there is a combination of that kind with the intent that the property should afterwards be acquired by one of the parties to, he agreement, it should be made an illegal combination. It may be urged that any interference with trade is bad business and a bad thing to do. I suggest that the essence of legislation is that it is to some extent in the nature of interference. In this case, the real interference with trade comes from these rings and will continue so to come unless they are checked. We do not feel that these middlemen in the form of the men who constitute these rings are rendering any substantial service to the vendor of the goods, or to the buyers of the goods, nor do the auctioneering profession feel that they are rendering any service to them. For that reason, we feel that this should no longer be tolerated.

Mr. A. V. ALEXANDER: When the hon. Member refers to middlemen, does he mean to say that this Bill is confined only to agents acting as middlemen?

Sir D. NEWTON: I was regarding the ring as being a sort of middleman between the vendor on the one side and the purchaser on the other. I do not regard him as a bona-fide middleman, serving a useful purpose to the community.
As matters now stand, vendors are frequently deprived of the full and fair value of their goods. Goods may sometimes be sold at much below their value and be sold a few minutes afterwards at a greatly enhanced price without the public being afforded an opportunity of acquiring them. It may be urged that the public have every opportunity of going into the auction and bidding up the goods and acquiring them, but I would point out that part of the machinery of the ring is to bid against any individual member of the public and to hid him up to a high figure, because they think that by that means they can discourage the public from competing against the ring.
Those of us who support this Bill feel that there is a real grievance which should be remedied, and a grievance with which legislation can to some extent cope. We frankly admit the difficulties, and if any hon. Member of this House can show any better way of dealing with this difficulty the promoters of the Bill will only be too grateful and his assistance will be only too welcome. It is sometimes said that a coach and four can be driven through any legislation. Sometimes a coach and four can be driven through legislation and sometimes it cannot. Sometimes the coach and four may get upset in the process of trying to get through. An Act is already on the Statute Book on somewhat similar lines to this Bill. I refer to the Secret Commissions Act.

Colonel WEDGWOOD: A dead letter.

Sir D. NEWTON: If that Act has not resulted in a large number of prosecutions, it has not proved altogether ineffective. I respectfully submit that the mere fact that it is generally known that secret commissions are illegal, has acted as a deterrent. Under this Bill is may be difficult and it will be difficult, no doubt, to get proof, but from time to time members of the rings will fall out, disagreements will arise and then action will, no doubt, be successfully taken. Auctioneers desire to purify their auction marts. It does not appear to be in the public interest that anyone should be able to go to the Board of Customs and Excise, put down a £10 note, and walk away with an auctioneer's licence, just as if he were buying a dog licence or a gun licence. It is not desirable that anyone and everyone should be able to obtain an auctioneer's licence in this way, and the sooner legislation is introduced to deal with that matter and give a proper status to the men engaged in a valuable and honourable profession, the better for all concerned.

Mr. THURTLE: I take it that this Bill does not propose to interfere with the present system of dealing in auctioneers' licences?

Sir D. NEWTON: No, I think the hon. Member will find that my argument is relevant. It is time that the public should receive some measure of protection. The hon. Member for King's Lynn
(Lord Fermoy), in moving the Bill, referred to the position of agriculturists. From the point of view of the agricultural producer, whether that producer be a large farmer in a big way of business, a smallholder, or a labourer who only sends a pig to market once a year, the position of the vendor is unsatisfactory at the present time. The Bill only deals with one aspect of the marketing question, but the whole question of auction marts calls for consideration. The Markets and Fairs (Weighing of Cattle) Act, which we passed last year, is doing something in that connection. If rings are to be broken, not only is legislation required such as is now proposed, but steps must be taken for the regulation of auction marts, In this way, and in this way only, can the full value of open competition be obtained. So long as small auction marts are allowed to grow up anywhere and everywhere like so many mushrooms, then so long will rings be encouraged. It is only the auctioneer who is in a really strong position who can make a stand against rings but even he is to some extent in the hands of the buyers, because, naturally, he does not wish to take any action which would in any way tend to antagonise his clients. Sir William Wells, past president of the Auctioneer and Estate Agents' Institute, when speaking as a witness on behalf of the auctioneers before the Select Committee last autumn, said:
There is unanimous feeling that such evils, namely rings, do exist, and there is a unanimous feeling that if anything can be done to stop them the institute will be glad to see it done.
We hear that often among the members of rings there is a certain measure of intimidation exercised to force a, dealer to join a ring, but if there were legislation on the Statute Book it would be easier for such a dealer to stand outside the ring. Those of us who support the Bill are fully alive to the many difficulties which naturally confront legislation of this kind. It may be difficult to secure a prosecution in regard to certain agreements. There may be such a thing as a bona fide agreement, a legitimate business arrangement, as, for instance, one Government department not bidding against another. During the War there were cases sometimes of one Government department bidding energetically against
another Government department, to the detriment of the public interest. Again, there may be eases where a parent dies, and there is a dispersal sale of the property. In such a case it is clear that it would be unfair to restrict the children and the immediate relatives from entering into some kind of an agreement. But there is such a thing as common sense in these matters, and we think that if this Bill is administered with a little bit of common sense it may prove an effective instrument.
If the House accepts the view that there is a grievance, we hope it will give this Bill a Second Beading. We think that all the difficulties can be met and overcome. We think, for example, it may be found desirable to limit the number of persons lodging a complaint, and that one person only, namely, the vendor, should be permitted to do this. Again. it may be desirable that a time limit should be inserted in the Bill. We think that agreements which obviously are not against the public interest or policy might be accepted if they are notified to the auctioneer prior to the sale. But all these are Committee points, they are not questions of principle, and all we are asking the House to do now is to consider the main principle of the Bill; that is, whether there is a grievance, and whether this Bill will not do something to meet the grievance. We respectfully ask the House to support the Bill because it has already been through the mill in another place and because it is supported by the agricultural community, the auctioneering profession, and many others. We believe that this Bill is in the interests of both the producer and the consumer, that is the seller and the buyer. We believe that there is at present a real grievance and that it is proper to ask the House to make a legislative endeavour to grapple with this admittedly difficult problem.

Colonel WEDGWOOD: I beg to move, to leave out the ward "now," and, at the end of the Question, to add the words, "upon this day six months."
I have a confession to make. When I was very young, I induced the House of Commons to pass a message like this. It was in connection with the "Children's Charter," and I induced this House to insert a Clause making it a penal offence for anybody to give
alcoholic drink to an infant under three years of age. That has haunted me ever since. Fortunately, there have been no prosecutions under that Act, but, like the Ancient Mariner, I feel compelled whenever this sort of Measure is brought forward on a Friday afternoon to come down and testify to the truth. There is an enormous number of evils in this world, all of which we hope to put right On a Friday afternoon. Year after year we see honest and intelligent Private Members of Parliament bringing forward cures for everything, and the House passes them, generally without very much worry. After all, there is already on the Statute Book such an enormous number of dead letters that a few more will not matter. The argument which has always been used in the past is, that even if you cannot get convictions, if the Bill cannot be enforced, if it is never enforced, the very fact that there is on the Statute Book a law saying that such a thing is illegal will have an influence upon people and check the perpetrators of the particular crime. The argument always advanced in favour of these measures is that the influence of the law on public opinion is such that, whether the law is actually enforced or not, the knowledge that it is the law creates public opinion and makes the particular action you wish to stop not actually a crime but a moral offence and therefore checks it.
The promoters of this Bill think that if they pass this Measure—they do not say there will be any convictions under it—the people in these rings will say "Here is an Act upon the Statute Book passed by 615 Members of Parliament who think that what we have been in the habit of doing is wrong"—and, therefore, they will stop doing it. They may. I do not know the members of these rings. There may be death-bed conversions at the instance of a majority of the House of Commons. But, on the other hand, you have to remember that the more Acts of Parliament you put on the Statute Book which are not enforced the more will Acts of Parliament as a whole be disregarded by the community. If you are going to fill up the Statute Book with laws that you do not intend to enforce, people will begin to believe that those laws which you do intend to enforce are equally futile. If you take a moral offence and make it a penal offence, then
people will begin to believe that all penal offences are really trivial matters and ought not to be regarded with the same amount of detestation. It is obvious from the speech of the hon. Member for Cambridge (Sir D. Newton) that he knows that this Bill cannot be enforced, and anyone reading the Measure will see that it is impossible to enforce it. It says:
Any agreement made with reference to a sale by auction not to bid at the sale in competition with any other person with intent that the property offered for sale shall be afterwards acquired by the persons making the agreement or some or one of them from the purchaser"—
If that was really to be carried out, it would mean that every pooling agreement between buyers would become illegal. No attempt is being made in this House to make it illegal to form a pool for selling goods, but now you are attempting to make it illegal to form a pool to buy goods. Personally I think free trade is the best in either case, and if you do attempt to make it a crime for purchasers to pool together to keep prices down by destroying competition, that is competition among themselves, you are bound to apply, the same principle against sellers who combine in a selling organisation to keep prices up. All over the world we have seen, particularly since the War, the growth of these pools and combines, in which sellers combine to get a decent price for their goods. That is regarded almost as virtuous. In fact, we have been praising the right hon. Member for Carmarthen (Sir A. Mond) up to the skies for the skill with which he has organised selling agencies, and we are trying to get him to do the same thing in the steel trade and the coal trade.
I think every one realises that it would be foolish to attempt to interfere with combinations of sellers who are striving to keep up the price at which they can sell their goods. But is there any great difference between a combination of sellers and a similar combination of buyers? At the present time you have the American buyers in the rubber trade carrying out exactly the principle that is objected to here. They go to the rubber auctions in a firm pool, determined that there shall be only one American buyer in the market. That buyer buys for all the American houses, and then, I presume — I am not
acquainted with the details—shares out the rubber that he has bought among the different consuming houses who have combined in the ring, so as to limit the competition for the raw rubber on the market. It may be unfortunate for the rubber growers that there should be that combine, just as it is unfortunate for a man who has his household goods sold at auction that there should be an exactly similar combination among the furniture brokers as to the price they are prepared to pay at the auction.
Lovers of Stevenson will recollect that in "The Wrecker," the book with the famous knock-out auction in San Francisco, Jim Pinkerton was told off by the ring to bid up the "Flying Scud" till the unknown bidder dropped out. Members of a ring are in the habit of freezing out competitors in that way. According to this Bill, such people will he committing a crime. In the eyes of the people who own furniture, any sort of combination of this sort is extremely galling. But I cannot see that it is criminal. Suppose that you pass this Bill, and suppose it is conceivable that there will be prosecutions under it, is it not obvious that the individual brokers can combine in some other way to get round the law? For instance, why should all the brokers attend each sale, when they can tell off one man to go to a sale, and why cannot that man, after making his purchases, put them into a pool, and divide them afterwards? There are endless ways in which the provisions of the Bill could be broken without a prosecution being attempted. These agreements, I understand, are all verbal agreements with nothing in writing—gentlemen's agreements, whispered behind the hand in a Shore-ditch accent. How you can bring convictions in eases such as that passes the wit of man to understand.

Mr. THURTLE: On a point of Order. May I ask whether an hon. Member has the right to reflect upon the accent of the constituency of another hon. Member?

Mr. SPEAKER: It seems to me very harmless.

Colonel WEDGWOOD: The accent is not, Sir. The representative of the Home Office, when this Measure was
being debated in another place—insufficiently debated, and I hope it will be more fully debated here to-day-said that while he thought the Measure was quite a "nice little Measure," he did not see how it would ever be enforced, but it would not do any harm. The Home Office know all about little Measures that do not do any harm. They have a large supply of them in the pigeon-holes at the Home Office, ready to be trotted out at the end of the Session. If prosecutions cannot be obtained, I submit that we ought not to pass this Bill. It is not fair to keep on putting on the Statute Book Measures which the Home Office does not intend to enforce. It destroys the public trust in legislation, it makes the law ridiculous, and only too often it leads to the punishment of the decent, law-abiding citizen, while the man who is skilled at the job escapes free and makes increased profit.
Let me give another personal illustration of how legislation such as this affects the honest man. I came from abroad not long ago, and brought with me as Christmas presents for my two sons two perfectly beautiful watches. I determined to smuggle them through. I do not see why any Government should rob me. You know what the Customs do. They said, "you read through this list of articles and say whether you have got any?" I do not object to smuggling, but I object to telling a lie, and they took £10 out of me. Is it fair on Members of Parliament who have consciences that, although they vote against these iniquitous Measures, they have to pay, whereas 999,000 people who come with watches in their pockets get off scot-free? Knock-out auctions will go on just the same, except that a few nice respectable dealers will drop out and the others, if there are any, will continue to carry on exactly the same ring and pool or restrict the competition for buying an article in some other way. I expect they will go on exactly as before. When you think of the ramifications of company control, of buying syndicates that are in existence all over the world to-day, to imagine that you can prevent that sort of thing by a nice little simple Act of Parliament of four Clauses, such as this, is really believing too much either of human nature or of the capacity of this House to prevent what we do not like.
The Seconder of the Motion for the Second Reading spent most of his time explaining what he would like to see in the Bill and what was not there. If it is his own Bill, I do not know why he could not put into it what he wanted. It you do want all auctioneers to bear sound moral characters before they are allowed to sell old boots, that ought to be in the Bill, and we ought to know what sort of moral character the auctioneer is to have, what sort of examination he has to pass, what sort of education he has to have before becoming a chartered, certificated and fully-licensed auctioneer. Or if the hon. Member really thinks that there ought to be far more qualifications in the Bill protecting honest agreements, why does he not put them into the Bill? He has had the drafting of it. It is not fair to leave to other Members who are not interested in Measures such as this, the difficult business of drafting all the safeguards that are desirable, and 'then for the hon. Member to put himself before the world as the producer of a Bill which is intended to work.
In the Middle Ages—I think in the time of Henry VIII and probably long before—this House of Commons passed Measure after. Measure against all "forestallers and regrators." I never quite knew what a "regrator" was, but the meaning of a forestaller is obvious. We are still passing Measures against "forestallers and regrators," and if we are to learn anything from our history in the past it should surely be this—that while the House of Commons continues to pass Measures which fly in the face of economic laws, which fly in the face of human nature, they will fail, and such Measures will have to be repeated over and over again and inevitably lead to the same failure in the end. You cannot alter human nature by Act of Parliament. When you try to do it, you are deluding yourselves and your constituents, and preventing people from seeing that any legislation must be in accordance with the laws of nature, and the laws of political economy if it is to be a real success, and if it is to change society in the direction in which we want it to move.

Lieut.-Colonel GADIE: As an auctioneer, my object in rising is to endeavour to straighten out some of the
issues in connection with this Bill where there is a real difficulty. The superficial knowledge of some people upon this subject may lead them astray. I take the opportunity of asking hon. Members the pertinent question: Is there such a thing as fraud in the ring? If so, this House ought to endeavour to put it right. I am here to say that in certain lines there is fraud in the ring, as, for instance, if a man goes to an auction, not with the idea of purchasing, but with the idea of participating in the profits of a ring. That cannot be done in any other trade.

Lieut. - Commander KENWORTHY: Why?

Lieut.-Colonel GADIE: I will tell you why. The man who goes to an auction in the way I have described is probably a broken-down man who in the past has been in the trade. He finds there is a way of making money simply by attending auctions. He goes to the people forming the ring, and they accept him. He probably has no money but he knows the ring. Regardless of whether he is a wealthy man or a poor man, the auctioneer has to accept him as a bidder, and if property is knocked down to him the auctioneer has no redress. So, such a man stands to win, while the vendor or the auctioneer stands to lose. Can hon. Members tell me of another trade where you can do that without fraud?

Lieut. - Commander KENWORTHY: Bookmaking.

Lieut.-Colonel GADIE: I do not happen to be a backer, but I do happen to be an auctioneer—

Lieut. - Commander KENWORTHY: The hon. and gallant Member has challenged us to mention another trade. I say that the backer who is accepted by a bookmaker may act in exactly the same way as the broken-down bidder he has described. The bookmaker has no redress. Another trade is that of money-lending. There are certain scoundrels with titles and good connections who make a living by borrowing money from moneylenders, and who then come to Parliament for redress.

12 n.

Lieut.-Colonel GADIE: I do not quite follow the argument of the hon. and gallant Member. I always understood
that when a man made a bet on a horse, he generally put down his money, and that the first thing the book maker did was to handle the money, except in the case of credit betting. I do not know much about moneylenders, but in that case I suppose the moneylender would have a distinct understanding as to the man who was borrowing from him. I have pointed out, however, that in the other case, it is possible for a man to get money by simply going into an organisation at these auctions which is, I contend, an illegal organisation. Hon. Members opposite do not understand the ring. They do not know one jot about it. What happens in connection with the ring in certain trades, particularly the old machinery trade A man wants to buy a certain piece of machinery and attends the auction with the desire to purchase. When he gets there, he finds he is up against the ring. He is compelled either to employ one of these men on commission, or to enter into the "knock." There is not a Member in this House who, if he thoroughly understood the working of the "knock" would be a party to it. An hon. Member has spoken about conscience, but no one with any conscience at all would enter the ring. Yet if a man does not enter the ring for certain things, he cannot buy them at all. Who loses the money? The vendor loses, or, if it is a bankruptcy, the people whose interests are involved and who have been expecting a reasonable dividend find that they cannot get it. Somebody else comes in who has no right to it, and takes the plunder. These people assemble in the auction room or in the mill where the auction is taking place, and they bid, and without putting down a farthing, they go to some other room or sometimes even remain where they are or else go up to a public house and divide up the profits. There has not been any fair competition whatever. The right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) made some reference to an organisation which fixed the price of rubber. These men do not fix a price at all.

Colonel WEDGWOOD: I did not say they fixed a price.

Lieut.-Colonel GADIE: I understood the right hon. and gallant Gentleman to say so. I think he said they are prepared to buy it, and that the brokers fixed the price. I made a note of it at the time. I would point out that the men in the ring do not fix a price at all. Their object is to get the articles at an absolutely rock-bottom figure. The object of the ring is not to fix a competitive price, but to stifle and kill competition altogether. In some cases they do kill it. There if no fairer form of sale than the auction, if it is conducted in an honest and above-board manner. We ought to endeavour to protect both the buyers and the sellers of articles. Auctioneers do not want to be oppressive to the buyer who is as necessary to them as the seller. They want the best relations possible, but you cannot have that when you know there is a body of men in the auction room, not out to rob the auctioneer but out to do something which they know they cannot do except by means of the ring. The ring has to embrace everybody. The buyer knows he is going to be robbed if he does not join it.
As a member of the Auctioneers Institute may I say that we do recognise that there is a difficulty and we do not desire legislation which is going to penalise the honest man who wants to employ somebody else in a case where he himself is not anxious to bid. We have cases of men who cannot get to an auction, and there are others who may be a little bit ashamed to bid, and who prefer to get somebody else. Some have particular ways of indicating bids. I have had the experience myself of cases where a man merely winked and the auctioneer took his bid. That is done in order that another man who may be competing shall not know he is bidding. That is quite legitimate where there is bidding in fair competition. There are all kinds of forms of that kind, some of them very amusing forms, practised by men going into the auction room. I could tell hot. Members some amusing auction-room incidents—[HON. MEMBERS: "Go on"] In one case a typical Yorkshire farmer at an auction said to me, "Would you take a fiver?" I said, "Yes, I would." I waited for it, but it did not come, and
he looked the other way, and finally I said to him, "Did not you ask me if I would take a fiver?" and he said, "Well, a chap can ask a simple question, cannot he?" I thought he was quite right, and I enjoyed the joke. In the main, in all auction rooms in this country, you will find a very good feeling between buyer and seller, but we know of this difficulty, and we say that, whether or not this Bill will remedy it, if you give it a Second Reading, we shall know where we are. We feel content that the worst of the rings will be broken, and that the legitimate buying, whether by combination or otherwise, will still go on, but it will make it legitimate, in that the bidding is known to the auctioneer and that the vendor knows what is going on.

Mr. HARDIE: I would like to ask the hon. and gallant Member, who is an experienced auctioneer, this question. Suppose you reverse the case, as often happens, and take the instance of a new purchaser coming into an auction room, where there are others who have been accustomed to buying the articles that are being put up. They say: "We do not want this chap to come in and buy, because it will be another one in our trade," and they begin to bid the article up, so that the new man sees no profit in it. What does the hon. and gallant Member say to that?

Lieut. - Colonel GADIE: As an auctioneer, I should rather relish it. It would have one honest effect, which the ring has not, and that is that we should get the actual buyers, and if a man foolishly bought at too dear a price, he would soon drop out of the market. Hon. Members opposite apparently do not understand the ring, and I was thinking, when my hon. Friend opposite was speaking, that he would riot make a good auctioneer so much as a good parson. The one thing an auctioneer must not do is to endeavour to impress his audience with a certain fact and at the same time be chuckling to himself. He must be transparently honest. That is the attitude of the Opposition this morning. They are going to kill the Bill, because they do not like it, or else they are going to talk it out. Let them be quite fair with us on this side.

Lieut. - Commander KENWORTHY: Why is the hon. and gallant Member's name not on the back of the Bill?

Lieut.-Colonel GA DIE: I suppose they found some better man or some better-looking man to back the Bill. We, as an institute, have kept out of this until it has come on to the Floor of the House, and now we say as members of the profession that we think it will remedy a serious evil, and that it will put money into the pockets of the people who should have it, and not into the pockets of people who take advantage of rings in the auction room.

Mr. MORRIS: I was interested to hear the speech of the hon. and gallant Member for Central Bradford (Lieut.-Colonel Gadie), who has just sat down. I am sure he is a very successful auctioneer, because transparent honesty, which he says is necessary for a successful auctioneer, was characteristic of his speech. He is not supporting the Bill, his name is not on the back of the Bill, nor was the institute of which he is a member supporting it until it came here. All that he demands of the House, apparently, is that it should give the Bill a Second Reading; "and," says he, "we do not mind what happens to it after that; we merely wish to show that the House of Commons can deal with practices which are now rife in the auction room." There can be no doubt, if only to take the evidence of the last speaker, that there are many evils in the auction room and that there are sharks who infest it for their own purposes. The only question is whether this Bill is likely to do anything to mitigate or put an end to those evils.
The hon. Member for Cambridge (Sir D. Newton), who seconded the Motion for the Second Reading of the Bill, referred to the case of Rawlings versus The General Trading Company, which was tried by the Courts in 1920. That case did not come before the Courts because the vendors, who were the Ministry of Munitions, had any complaint to make about the sale or thought they had been defrauded, or had obtained a smaller price than they would have had if there had been no combination among the buyers. It came before the Courts because the two buyers, who had made a bargain one with the other not to com-
pete one against the other, had a difference among themselves as to sharing the profits afterwards. It was an action by the one buyer against the other, and in that case, which went to appeal, Mr. Justice Shearman originally found that, on the ground that the action was against public policy and in the restraint of trade, the sale was illegal, but upon appeal Lord Justices Bankes and Atkin decided that the sale was a perfectly legitimate sale. Lord Justice Scrutton dissented, but Lord Justice Atkin, in his judgment, said he could not conceive of the sale being in restraint of trade, because, among other things, if these two buyers had both agreed to be absent, from the sale, the Ministry of Munitions would have fetched a lower price for their goods than they actually did. There was no restraint upon trade, and there was no action in violation of public policy. The Ministry obtained a better price because of the action of these two men than they would have done if the two men had not attended the sale.
The real difficulty with regard to this class of case is, as I have no doubt the hon. and gallant Gentleman the Under-Secretary to the Home Office, if he speaks, will say, that there must be many complaints made to the Home Office from time to time by auctioneers and vendors about these sales. I have no doubt that cases have from time to time come to their notice, and I should like to know whether the Home Office have ever taken any action in these cases, and, if not, what is the reason why they have not taken action. Is it not because in the cases, if any, that have been brought to their notice, they have not found that there was sufficient evidence to justify them in lodging a prosecution? The real fact of the matter is that only those persons who are innocent enough to be caught will be caught under this Bill, and the sharks will still be able to carry on their business undeterred. If you take the very case of Rawlings versus The General Trading Company, heard in 1920, where two persons agreed to go to Dublin for the sale by the Ministry of Munitions of tins—because these are the facts of the case—and one said to the other, "Don't you bid at this auction: I will bid; I understand Irishmen and
how to deal with them better than you do," is it to be said that that is an illegal bargain?
Take another case, which was heard a few years before that, which came in the same way, not at the instance of the vendor, but owing to a breach of contract between the two men themselves. There was the sale of an estate abutting upon the land of two neighbouring landlords, both of whom wanted to buy a part of that estate. One of them, A, said to the other, B: "Are you going to purchase part of this estate?" B said, "Yes, if I can at the auction," and then asked, "What are you going to bid for it?" A said, "I am prepared to bid £33,000." B said, "I think I can buy it for £19,000 and then we can divide the lot between us." Can that be said to be illegal? They went to the auction on that agreement, £19,000 was the highest figure offered at the sale. The vendor in that case exercised what is a proper prerogative by setting a reserve price and withdrawing the lot, as he can always do if the vendor is not satisfied. That happened in this particular case. That estate was eventually sold to A by private treaty for the £19,000 offered at the auction. It cannot be said there was a fraud upon the 'vendor, but under the Bill that would be a fraud, and both A and B would be guilty of a criminal offence.
The Seconder of the Bill drew attention to the case of children coining into personal estate upon a death. What is to happen to them if they make a bargain between themselves? They would come under the terms of this Bill. By all means have a Bill if you can get at the sharks and prosecute them if there is a case of fraud. If the fraud can be proved now, either by the auctioneer or by the vendor, they can be convicted. There is sufficient protection for the vendor, and if you cannot prove it now, you cannot hope to prove it any more because you have this Bill on the Statute Book. I quite agree with the hon. Member who seconded the rejection. I do not mind one way or the other whether this Bill passes into law or not, except that I fully agree with him that there is no point in putting upon the Statute Book an additional criminal offence, when you know you cannot produce the evidence to put a single one of these sharks in the dock.

Major HILLS: I always listen with very great pleasure to the speeches of the right hon. and gallant Gentleman the Member for Newcastle - under - Lyme (Colonel Wedgwood). He is such a strong individualist, and always seems to be in such strange company in the Socialist party, but sometimes—if he will let me say so—he allows his individualism to carry him away. On this occasion it is leading him, and he is leading his party to support one of the most corrupt, and fraudulent parts of what you call "the capitalist system" 'that you can find. Just let us sec what a ring at an auction is. It is a combination by the buyers at that auction to crush all bidding except by their members, and offer a low or nominal price in order that they can meet afterwards and divide the plunder among themselves. The man who sells gets a very low price and the public to whom the goods are passed ultimately do not get those goods at a cheap price. In the case of rubber to which the right hon. Gentleman referred the combination is to give the buyer and user of rubber cheap rubber; but the object of an auction ring is to give the seller of goods as little as possible, and charge the public as much as possible when they are resold. It is perfectly well known, and my hon. and gallant Friend who has spoken with a humour and an adroitness which as ere very refreshing, has told the House that this sort of thing is happening now. Is permeates the auction system.
I wonder if the Labour party are going to oppose this Bill. There have passed through my mind certain reasons which I will not particularise why they are so anxious to talk on this Bill. I make no charge. I merely say there passed through my mind certain reflections which I refrain from giving to the House. I am not sure that the right hon. Member for Newcastle-under-Lyme is not leading his party into a position which they will regret. I should not like to see that at all. I should not like to see them make a false step, and it seems to me they are putting themselves in this position: Either they intend to speak against the Bill and then to vote against it, in which case I think the public will not appreciate their action; or they intend to speak against the Bill up to a certain time limit, and then not to vote a against it, in which case, I think, they will look rather foolish.
So I do hope they will not listen to the right hon. Gentleman but will take my advice for once, if I may offer it to them. I think a great many of them do see, that though there may be things in this Bill which would hit the honest buyer, there is a real evil.
I have listened with very great interest to the speech of the hon. and learned Member for Cardigan (Mr. Morris). He has shown, I quite agree, that certain quite legitimate operations might be made criminal under this Bill, but he knows perfectly well there is a real evil to remedy, a real evil that benefits nobody except the fraudulent ring, and I am pertain that with his knowledge, if he were a Member of the Committee which considers this Bill, he could suggest Amendments which would remove the evil and strengthen the good parts of the Bill. I agree with him that the Bill cannot pass into law as it stands now, but the evil is there. It is recognised, I think, on all sides of the House. I hope, therefore, the House will give the Bill a Second Reading, and then, I am quite sure, in Committee we can remedy the defects.

Mr. A. R. KENNEDY: The Seconder of the Bill said that if the House accepts the view that there is a grievance, then the House will accept the Bill. Nobody in this House or outside, perhaps, who has any practical experience of the management of auctions would doubt that there is a serious grievance, and the question which the House has to consider, in my humble judgment, is whether the remedy which this Bill seeks to apply is a fit and suitable remedy. I do not entirely share the strong view of optimism expressed by the hon. and gallant Gentleman who has just sat down. Perhaps because I am a lawyer, I take rather a serious view on the question of extending crimes. I think the House will accept the view that it is a wholesome rule that only when a practice is clearly vicious, and civil safeguards do not exist, is it desirable to make it a subject-matter of crime. In this case, if the Bill passes in its present form, can it be said there will not be an excess of remedy? Clause 2 provides, in effect, that the vendor, on discovering that there has been a knockout—and no doubt deciding for himself that the price he has obtained is less
than the price he ought to have obtained—may elect to void the sale. He has the opportunity of electing to say, "This sale is null and void, and I claim the article back, so that I may either possess it again or put it up for sale again." That is a remedy which the law at present does not provide. The cases which have been cited this morning result from the fact that, according to the law as it stands at present, a vendor who is legitimately-aggrieved by a sale which has been a knock-out has no remedy in law unless he can prove some wilful misrepresentation, which rarely exists, on the part of those who purchase. If and so far as this Bill is directed to provide the remedy that a vendor in a proper case may void a sale where it has been improperly conducted by reason of a knock-out, I, too, would agree with that.

Mr. MORRIS: I quite agree with what the hon. and learned Gentleman is saying, but in the case I cited the vendor was not complaining at all.

Mr. KENNEDY: I quite appreciate that, but if, as I fancy they do, the promoters of this Bill put in the forefront of it the desire to make this knock-out a crime then I, for one, would have considerable difficulty in supporting it. At least it should be so arranged that if the Bill be given a Second Reading it shall emerge finally in a form which substantially carries out the remedy provided in Clause 2. As has been stated, if it would be difficult to get sufficient evidence—and it must necessarily be so —of the existence of a knock-out to enable a. vendor to void the sale under Clause 2, how infinitely more difficult will it be to obtain sufficient evidence to justify a conviction?
There are a good many circumstances which could be imagined, and some people may have had experience of them, in which persons agree together, without any criminal intent or any intent to defraud, either to abstain from bidding or to abstain altogether from a sale. May I give one illustration? It is one of the early cases, and is a leading case on these matters. Two gentlemen were minded to buy some land which was to be put up for sale by auction. Both wanted the land but, being very
friendly, neither wanted to bid against the other, as a matter of courtesy and friendliness, and they came to an amicable arrangement by which one should bid, and he agreed that if he were successful in purchasing and desired to sell subsequently—as might very well be the case, and as was the case here—he should give his friend who had agreed to abstain from bidding a right of preemption. There is nothing harmful in that. I cannot see anything immoral in that arrangement, I certainly can see nothing which ought to stigmatise it as a crime; and yet, if the Bill were to pass in this form, such an arrangement, or any other equally innocent arrangement, would land the parties to it in the unfortunate position of being criminals before the law. I think the House, as trustees of the liberties of the people, ought to be very careful before fastening the stigma of crime upon transactions which in many cases may be entirely innocent; and, therefore, unless the promoters of this Bill indicate that there may be such drastic amendment of it as will cut out entirely Clause 1, and are content with the remedy provided in Clause 2, I, for one, shall have very great difficulty in supporting it.

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Captain Hacking): Before addressing myself to the provisions of the Bill, I have to announce that my right hon. Friend the Home Secretary is disappointed not to be here himself to speak on the Bill. But, unfortunately, he is indisposed with a slight attack of influenza. We have had a very interesting discussion on this Measure and we have had from the hon. and gallant Member for Central Bradford (Lieut.-Colonel Gadie) a very interesting speech as a result of his practical experience. We have had from the Mover of the Bill a general outline of its principles, and we have had from the Seconder a full history of the subject and an account of many grievances which at present exist which he thinks would be covered and cured by the Measure. There is no doubt that rings are formed. We have heard that from the hon. Member for Central Bradford, and we know it from the proceedings of the Select Committee set up in the House of Lords. We have had every evidence to show that these rings are formed. We know that public auctions
are held, and that afterwards private auctions are held at which the same goods are disposed of again, but at very different prices. But I venture to suggest that it is difficult to devise provisions to check undesirable practices and not at the same time to bring within the criminal law persons entering into agreements which are quite innocent and not so clearly indefensible as to justify criminal penalties. Attention is directed by the promoters of the Bill almost exclusively to cases in which hardship is caused to the vendor by a combination among purchasers. There may also be cases, which the House should take into consideration, in which combinations among purchasers are perfectly proper for the purpose of—if for no other—bringing down the price of the articles offered for sale to a fair level.
One could give several illustrations of what I mean, but two perhaps will suffice. It is easy to conceive that several individuals possess 11 Chippendale chairs and that each of them is very anxious to purchase a twelfth to make up the set. If those several individuals go to an auction it is quite conceivable that by bidding against each other they will put up the price of the chairs to a perfectly unreasonable level, and I myself cannot see anything very criminal in A saying that he will go to one auction and bid there and try to get a chair, that B will go to another auction, and C will go to a third auction. Take, for example, a small country market and two butchers who do not require for their business a whole bullock but wish to share one between them and have half each. I see no reason why they should not agree that only one of them should bid at the auction sale and then share the beast afterwards. Such an agreement would be in the public interest, because it would undoubtedly keep down the price of meat. Those are two illustrations which ought not to be dealt with under this Bill. It is possible, if the Bill passes in its present form, that you would create difficulties which ought not to exist. The hon. and learned Member for Cardigan (Mr. Morris) asked me if the Home Office have taken action in connection with the legality or otherwise of the knock-out. In the evidence given before the Select Committee of the House of Lords on the Auctions (Bidding Agree-
Bill on page 37, paragraph 3, the following appears in a paper which was handed in by Sir Ernley Blackwell, the Assistant Under-Secretary of State for the Home Department:
3. In 1908 a case was brought to the notice of the Home Office where dealers were alleged to have agreed not to bid against one another, and to have subsequently held a second and private auction for the purpose of re-auctioning among themselves several articles bought at the auction and of sharing the profit on them. It is presumably this practice at which the Bill is aimed. The matter was considered in 1908 in consultation with the Director of Public Prosecutions, but it was decided that, having regard to the legal decisions, such an agreement was not per se illegal and that, in the absence of any evidence that would establish a charge of conspiracy, criminal proceedings were out of the question.

Mr. MORRIS: I want to ask whether any complaints have been made to the Home Office about the fraudulent nature of these transactions.

Captain HACKING: I cannot answer that off-hand. The conclusion of the Home Office and the Government is that we admit that there is a general evil existing to-day with which it is desirable to deal. We are not sure, however, that this Bill will effect a complete cure. We are not sure whether it will not adversely affect cases which would never really or rightly be considered as criminal, but we recognise the laudable objects of the promoters of the Bill. As is usual on a Friday, the Government Whips will not be put on, but the Government are quite prepared to advise the House to give the Bill a Second Reading, and if that is given we are prepared to assist the promoters during the Committee stage with all the information we have at our disposal. We ask for the co-operation of all Members in devising Amendments to limit the provisions of this Bill to those practices which are recognised by common consent and by all parties in the House as being mischievous and unfair.

Mr. RAMSAY MacDONALD: The Bill before us this afternoon raises a question in which a great many Members of the House are interested from different points of view and for different reasons. Everybody who has had occasion to go into an auction room or has taken an interest in any article which is for sale in an auction room knows the extent to which these
practices prevail. My experience, however, has never been that they have reduced the prices paid to the vendor but have increased them. One of the operations of the ring is that if you go into an auction room and bid against them, you are soon told that you will not get what you want, and afterwards the private auction takes place between the members of the ring and they square up the uneconomical price they have paid when they met to buy. I have had experience in two different cases during the last few months at provincial auctions, where a certain article in which I was specially interested was treated in that particular way. Therefore, when we deal with this matter let the House remember that the ring operates that way as well as the other way. The ring among dealers is just an evolution of private enterprise which hon. Members opposite regard as the ark of the Tory covenant.
An hon. Member has stated that he was not able to penetrate the reasons why we were discussing this Bill. I shall not attempt to penetrate into the reasons why hon. Members are supporting this Measure, but I believe its origin is very simple, because it is a combination of private enterprise to look after its own interests. The hon. and gallant Member for Bradford (Lieut.-Colonel Gadie) told us of certain experiences he has had, but what was the logical outcome of his speech?. He knows perfectly well as an auctioneer that unless he has been able to get specially good prices for some inexpert vendor that vendor is never satisfied with what he has done. If a vendor sends a picture for sale under the impression that it is a Constable and he finds it is knocked down for £5, that vendor is always full of complaints against the auctioneer. If there is any logical conclusion to be drawn from the charming and delightful experience of the hon. and gallant Member for Bradford, it is that an auctioneer should be made responsible for the final bids he takes from people whom he happens to know. Of course I do not suggest that is applicable to the hon. and gallant Member, but I do think that is the only logical conclusion from his speech.
There are vendors who act as middlemen, not only in regard to agricultural produce but in regard to other things
as well. At an auction sale which takes place every Friday afternoon in a certain auction room in London hon. Members can see what takes place. The individual competitor comes in and there is a large number of individual competitors. They do not agree among themselves to offer bids, but they employ an agent, and these agents bid against each other. Sometimes it is more convenient for them to lay their heads together and come to an agreement. I would like to ask, what is the difference between doing that and a selling or a manufacturing trust? That is the inevitable and logical conclusion of private enterprise and individualism in regard to all these transactions. A time comes when the individual competitor finds that it suits his interests far better to stop competing and to come to an agreement and that is what has happened with the individual dealer.
I know that there is a great deal of most improper practice carried on. There is no dispute on either side of the House about that. But then, as the hon. and learned Member for Preston (Mr. A. R. Kennedy) says, there are a dozen and one things that ought not to be done which nevertheless the House of Commons cannot make criminal. That is the test of this Bill. We are not in favour of these rings. We are not in favour of these practices. Some of these practices are most detestable. If vendors are cheated, I think vendors can protect themselves very largely by doing something much more frequently than they do, namely, by putting an upset price on their goods, which is equivalent to a withdrawal from sale if what they consider is a fair price is not realised. But while all agree that the practice is not a good one, to treat this great question of industrial combination, whether among producers or middlemen, this question of industrial combination which is going on all over the world, and which is becoming international as well as national, in a miserable, pettifogging little Bill like this, is playing with it under circumstances which, again not wishing to go into explanations, are at any rare very suspicious. Take the position of the hon. and gallant Member for Ripon (Major Hills). He says: "I have got a good cause. These
rings are bad." Then, having laid that down, he immediately turns round and says: "Of course, I do not believe in the Bill. The Bill requires so much amendment that I should be awfully glad if you would help me to amend it. There are things in it which ought not to be there, and there are things not in it which ought to be there, and there is no value in the Bill at all."

Major HILLS: Oh, the Bill is of some value.

Mr. MacDONALD: I gathered from the hon. and gallant Member that he was not at all sure about any part, except that it meant to do a good thing, and therefore he came to us and said, "Since have become Member for Ripon I have had experience of certain difficulties that my constituents have undergone. It is wrong that a farmer should get less for his bullock than he thinks is fair, or than what we might call the cost of production, or, the economic value, because five or six gentlemen, instead of acting separately and individually, act in co-operation and in combination. Therefore, I want to make that combination illegal. In making it illegal, I am not quite sure of the means that are being adopted, but, in order that we may assure our people that we mean to do something, we have drafted this Bill, and we shall be very much obliged if the House will carry it and put it in order in Committee." It is playing with the House of Commons. The only comment I wish to make is that I do commiserate with the poor unfortunate British farmer, who is told to believe that this Bill is going to help him on having fallen into the hands of such incompetent custodians as are revealed by those who have produced this Bill and who are now advocating it on the Floor of the House of Commons, and on being really likely to get into a worse state of things than those under which he now complains he is living. I hope that this House will show, not its support or approval of rings, not its approval of the operation of rings, hut that it does not approve of a method of window-dressing such as this Bill is. Those who have drafted it, those who have moved it, and those who have supported it, one and all confess to its utter and absolute incompleteness and inability to meet the situation
with which it is supposed to deal. I hope that the House will reject the Bill, because, by doing so, it will declare once again that it desires that those hon. Members who introduce legislation of this kind should at any rate take the trouble to produce a proposal that on the face of it appears to be fair.

Mr. RYE: I do not know why the right hon. Gentleman the Leader of the Opposition should so consistently inpute mala fides to those who sit on this side of the House. Here there is an undoubted grievance and an undoubted evil. I think the right hon. Gentleman will admit that the knock-out system is an evil. Yet, because a Bill is brought in on this side of the House, a Bill which frankly may not go quite so far as it should to protect the owner, the vendor, or the seller, the right hon. Gentleman gets up and says, "This is mere window-dressing. This is merely brought in as a species of eyewash and for party political purposes." For myself, I protest against any such statement. It is a genuine and bonâ fide attempt to deal with an admitted evil. It may possibly be that the Bill as it is drafted is not adequate, but, if it be given a Second Reading, as I hope it will, when it gets into Committee upstairs it can be amended and can be brought down again to the Floor of the House in such shape as will undoubtedly put an end to the evil, the knock-out system, the combination and conspiracy of dealers to get the better of owners of property.
One thing it can do and one thing I hope it will do is to get rid of those parasites, those small people who make it their practice to force their way into the ring. I am not holding any brief for those engaged in the knock-out, but I cannot help feeling some sympathy for those gentlemen who have forced upon them a number of parasites who never intend bonâ fide to purchase anything at all but, who by a species of blackmail force themselves into the ring, into the second auction, and draw a share of the profits. The hon. Gentleman who has special knowledge of the auctioneering business drew particular attention to that side of the question, and I do trust, whatever is done, that the law will be so strengthened and so altered as to put an end to that type of individual. The right hon. Gentleman the Leader of the Opposition said
there was no difference between a ring of manufacturers or merchants and a knock-out. I cannot agree with that view, because, as I have already shown, there are a number of people engaged in the knock-out and who participate in the knock-out who are newer actually handling the goods at all, but who are merely there for the express purpose of taking something out of the transaction.
The right hon. Gentleman gave the converse case. He said something in favour of the knock-out, namely, that a knock-out resulted in prices being forced up, inasmuch as members of the ring were not willing to allow private buyers to come in and secure the profit. That is perfectly true, and if any Member of this House were to go into an auction room desirous of purchasing some particular article, he would no doubt be run up by the ring. The result is, of course, that the vendor receives more than the market value. But there is another side to the question, and that is that the private buyer and small dealer are driven out of the auction room. If I go to an auction room and the net result is that I am unable to buy owing to the price being forced up, or that, alternatively, to use the language of the auction room, I have it "dropped upon me," at a price in excess of its value, I do not go again. The result is that the ring do more than secure things for themselves, they drive competition away.
Though I agree as to the viciousness of the system, I do not think the Bill will do much good unless it is seriously amended. I agree with the right hon. Gentleman as far as that, but he seems to suggest that a Bill can never be altered, that a Bill has never been read a Second time in this House and has then come back to it again after being drastically amended. The germ of the Bill is right, the principle is right, and it is for the Committee to see that they amend the Bill and bring it back in a workable form. To pass the Bill as it is drawn to-day would mean that the members of the ring could get the better of anyone who endeavoured to stop them. The right hon. Member for Newcastle-under-Lyme (Colonel Wedgwood) drew attention to one matter that
is not a criminal offence under this Bill. There is no reason, too, why dealers should not decide among themselves as to the various goods they wanted. That is not a criminal offence under this Bill. There is no reason either why, if there are, for instance, four dealers in a town, they should not pick the days on which they want to bid. Suppose there are four of them, A, B, C and D. They may say, "A, it is your turn; we will stop away." Then the others will have their turns on the other days. That would not do any good, and it would achieve for the dealers the same result as is achieved to-day, when the knock-out exists, with this benefit to the dealers, that they would eliminate the parasites. Still, whatever drawbacks there may be in the Bill as drawn, the whole intention is a good one, and I shall be very much surprised if the right hon. Gentleman opposite and the Members behind him will go into the Lobby and vote against it.

1.0 p.m.

Lieut. - Commander KENWORTHY: The hon. and gallant Member for Ripon (Major Hills) gave a good deal of advice to us on this side of the House, and expressed himself as being very disturbed at the idea that we might make a mistake, and might do something which might be used against us. All I say to that is the old maxim, "Beware of the Greeks when they come with gifts." When we need advice of that kind we prefer to listen to the right hon. Member for Aberavon (Mr. Ramsay MacDonald) than to the hon. and gallant Member for Ripon. That is what we intend to do to-day and, if we had any doubt about it, we would have none after the speech made by the hon. and learned Gentleman, who although he sits for an agricultural division and I have no doubt knows all about the farmers, has been or is very near Westminster. After his speech and the speech of the hon. and learned Member for Preston (Mr. A. R. Kennedy), and, above all, the speech of the hon. and gallant Member who spoke for the Home Office, no one can vote for this Bill with a clear conscience. What is remarkable, too, about this Bill is that we look in vain to see the name of the only auctioneer in the House on the back of this Bill. As the Mover and
Seconder have had to leave the House, perhaps the hon. Member who speaks for the Farmers' Union will inform us why, when the names were put on the back of the Bill, the only auctioneer in the House was not invited to put his name down. Perhaps he would tell us, too, why all the backers are confined to one party. If this is such an excellent Bill, why did not the promoters of the Bill seek the support of other parties? If I wanted a private Member's Bill to go through, I would go to the hon. Member opposite. But, if it is only for party capital that you want it and in order to cover up the fact, which the farmers are beginning to find out, that you have no agricultural policy, I can well under-stand why only Conservatives' names are on the back of the Bill. It will be said, I suppose, "Oh, this Bill only affects country auctions. It is only in agricultural auctions where these evils exist. There is not expected to be much opposition to it." We can now understand why those paragraphs appeared in the newspapers. This is the only contribution this Session to the agricultural problem; it is the one contribution to the agricultural problem from the hon. Gentlemen on the Back Benches on the other side of the House who represent agricultural constituencies.

Major McLEAN: And you oppose it.

Lieut. - Commander KENWORTHY: Certainly. The fact of the matter is that the farmers in this country are extremely hard hit. Cheap food is imported into the country and the only remedy the hon. Gentlemen opposite have is a system of tariffs and they are not allowed to bring that in by the Conservatives who sit for industrial constituencies. They fall back then on all sorts of substitutes. One day it is the marking of grapes and gooseberries imported into this country. The next day it is a petty Bill of this kind and I suppose to-morrow it will be some Bill about which they can talk at dinners of farmers societies and say what friends they are of agriculturists. The real blot on the Bill was pointed out by the hon. and learned Member for Preston. I would ask any Member who has any doubt to look at Clause 2 of the Bill. Under this short Clause, any vendor or his agent can complain against the sale
if he is not satisfied with the price. That means that no bidder, bona fide or otherwise, will ever be sure he has made a secure purchase. If this Bill passes in this form, you will ruin the whole system of auctioneering in this country. It will mean that no one can bid at an auction and be certain that no complaint will be made. That alone should be sufficient to decide everyone to vote against it. The next objection I have is that this Bill, according to the speeches of those who have so far favoured it, is aimed entirely at the small dealers. The great brokers in Mincing Lane dealing in thousands of tons of tea, the rubber brokers and the other dealers in raw commodities, most of whom might be described in the words of the hon. Member who has just spoken as parasites, are apparently ignored, yet they have rings.

Sir BASIL PETO: Does the hon. Member say that brokers who deal in Mincing Lane never see and handle the goods? What does he know about Mincing Lane?

Lieut.-Commander KENWORTHY: It is perfectly true that a great many people who deal in commodities on the commodity market never do handle or see the goods. There are products from India which it is almost impossible for anyone to buy unless he is a member of the ring. I can quote an actual case of which I have some knowledge, namely, that of mica. The market for mica is very restricted; it is only produced in one or two countries, and only certain qualities are obtained in India, and only from certain mines. Mica is a commodity for which no substitute has been found. It is absolutely essential for certain electrical manufactures—you cannot make a good dynamo without mica; and you cannot to-day buy mica except from a member of the mica ring. I have tried as a manufacturer and user to buy mica against the ring, but it is impossible, and those gentlemen for the most part never touch or handle it. That is an actual case which I can give to the hon. Baronet from my own experience; and my hon. Friend the Member for Hillsborough (Mr. A. V. Alexander), who is connected with the vast co-operative movement in this country, and probably knows as much about practical business as any Member of this House, confirms what I have said.
There are similar rings on the Stock Exchange, and this Bill is not in any way aimed at them. It is the usual Conservative trick of making scapegoats of a few small men whom they call middle men, and leaving the great offenders untouched, as the right hon. Gentleman, my Leader, has pointed out in different words. Do not let us take this Bill too seriously. I am sorry if I have been led away because the hon. Member for Barnstaple (Sir B. Peto) doubted what I said, but I wished to show him that I knew something about one commodity at any rate. We have had quoted against us the great case of Cohen versus Roche: but, as has already been shown, in that case it was not the vendors but the buyers who complained. The fact of the matter is that combination, as has been said, is, under the present system, inevitable. The brains of the party opposite—I do not see many of them in the House at the moment—are recognising that, and are forcing combination upon great industries like the railways and the coal-mining industry. They are forcing combination because it is efficient, and that is why it is bound to come.
Hon. Gentlemen opposite are forcing combination on industries that will not combine and organise themselves. In the case of the railways they have already done it, and in the case of the mines they are talking about it. The difference between them and Members on this side of the House is that we say that in the present state of the world the ebb and flow of the markets leads to loss and inefficiency. We are suffering from that to-day and we propose to control the prices of agricultural products coming in from abroad, in the interests of the whole people. We say that, when we have to interfere as a Government in great basic industries like the railways and the mines, the profits of that interference—the results of the economies, the greater efficiency, the greater savings of this forced combination, which has been forced on them by this House—shall go to the benefit of the whole people. Hon. Gentlemen opposite force these combinations on the railways and the mines, but they say that the benefits are to go to the people who own the majority of the shares—to the directors
and controllers who are private individuals. That is the great difference between Conservative Socialism—because the Conservative party are being forced into Socialistic Measures, as the history of the mines has shown, and every intelligent Conservative recognises that —and our Socialism, which is national Socialism, modern and scientific.
Might I just quote one case to the Seconder of the Bill, as the Noble Lord who moved it is not present. What is he going to do in the case of a husband and wife who go to an auction and, unknown to each other, bid for the same article? Would not that be regarded as prima facie evidence in a court of law that there was collusion between them? And yet it is a well known fact that that has been done. The effect of this attempt to interfere with private enterprise, which the Conservative party is continually doing in order to leave the great vested interests untouched, will simply be to support the professional buyer and dealer, and to make it all the more difficult for the private buyer to compete at auctions. In fact, this Bill, as its own friends, including the Government, have said, is very badly drafted, and quite unworkable as it is at present. It only touches the fringe of a very large subject. We look upon it as window-dressing, as an attempt to placate the indignant, farmers, who are finding that the Conservative Government does them more harm than any other; and we are not going to be parties to a fraud on hard-working and deserving, although very often discontented, agriculturists. Therefore, with a perfectly clear conscience, in spite of the sadness of the hon. and gallant Member for Ripon (Major Hills), we shall follow the advice of our Leader.

Mr. LAMB: The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) attempted to draw me, and to suggest that this was a party Measure. I sincerely hope the House will realise that there is no party spirit whatever about this Bill, and that the mere fact, for which I am not responsible and for which I am not supposed to answer, that the names which appear on the back of the Bill happen to be those of Members en this side of the House, must not be
taken as in any way indicating that it is only Members on this side who can see the evil which this Bill attempts to remedy. I know, as a matter of fact, that so many people were desirous of putting their names to the Bill that the promoter, in self-defence, took the first who came to him, in preference to making any other selection. I support this Bill, and I feel that so many admirable speeches have been made in favour of it that the case has been proved, at any ate to the extent that it is certainly wise that we should give the Bill a Second Reading and allow A to go to a Committee.
The hon. and gallant Member for Central Hull referred to rings on a large scale. I would like to remind him, quite briefly, that it is not so very long ago that we heard from the other side the suggestion that there should be a ring for the purposes of selling coal. Such a. ring would be very large, and would not be in the interests of the consumer. This Bill, at any rate, deals with an admitted evil. It is our desire, and, I believe, the desire of many others in all quarters of the House, to deal with the question of rings which are against the producer and are not in favour of the consumer. When an individual buys at a reduced price which is not the true market value, if he retains for himself, or those who are working with him, any balance, and again demands from the consumer a price which is very much higher, he consequently retains for himself what I consider to be ill-gotten gains. The Bill is small, but I hope that because it is small it is not going to be thought that it is not big in its intentions and desires. The evil that it is desired to eradicate is undoubtedly a very large one; it is admitted by all: and, although the Bill happens at the present time to be small, I believe that in Committee it can be made a Measure which will very largely deal with this grave and growing evil. I say a "growing evil," because I believe it is a growing evil because there is no deterrent to these people to make them stop their nefarious practices, whereas an Act of Parliament would undoubtedly have the moral effect of preventing, I hope and believe, a continuance of this evil. At one time I believe it was generally understood that it was outside the law, but unfortunately it has been proved in the
Law Courts that it is not absolutely illegal, and I think the time has arrived when we should take some measures as effective as possible to see that it is de dared to be illegal that this sort of thing should continue.
Let me divide auctions into three classes. Reference has been made to auction rooms, but all auctions are not carried on in rooms. Some are carried on in the open. As a rule those that deal with agricultural produce and the food of the people are not carried on in rooms, with the exception of fruit. The first class of auction I should say would be those that deal with general merchandise, there is another class that deals very largely with art treasures and those generally which deal with food. In regard to the first, no one can defend a combination which has the avowed object of depriving the seller of some of the legitimate price which he ought to obtain on the market value and to retain some of that price for themselves. The second, I think, is rather a special class of its own. There are cases within the memory of many of us where individuals who are experts in art have spent the whole of their spare capital, and perhaps some that ought not to have been spared, in the purchase of art treasures and at their death those treasures have been thrown on the market and have come into the auction room. The very individuals who have perhaps taken advantage of that connoisseur and sold him articles at big prices are themselves the people who form rings and go into the market to get those same articles back at a non-market price. Here very probably the widow and children of that man are hit by being deprived of the legitimate value of the articles. To my mind it is an immoral action and one that ought to be made illegal.
With regard to food, the Leader of the Opposition said it was depriving the producer of the cost of production. It is nothing of the sort because unfortunately the cost of production of agricultural produce never enters into the price. The real price is the marketable value as determined by the general public, and that is the only price which the agriculturist admits and which he has a right to. This is an illegitimate attempt by certain individuals to deprive the producer of that legitimate price. They do
not pass on the price at which they have bought plus the legitimate profit. They themselves take the advantage of the market, whatever it is, and put into their pocket the difference between the two, so that in this case it is not only the producer who is hit but the actual consumer, who does not get the benefit of the action these men have taken. It is to my mind a most immoral, and I hope it will be made an illegal action. I will not speak for the auctioneers because their case has been so well put in a speech to which I listened with very great pleasure, showing that they themselves recognise the difficulty and are only too anxious to carry on their business holding the balance fairly between the two parties, the seller and the buyer. We have to remember that in many of these cases, particularly in dispersal sales, the auctioneer may be looked upon with suspicion, unfortunately and undeservedly, because he is selling to men who will be future customers, and selling for one who will perhaps never be a vendor again. That is an unfortunate position in which to place the auctioneer, and if there is anything we can do to strengthen his position in dealing with those who are not carrying on business in a legitimate manner, it is our duty to give him the opportunity.
I appeal to the House to give a Second Reading to the Bill. I do not propose to go into Committee points. It is most unwise for this House to set up a Committee to deal with a subject and then to do here in this House work which ought to be done in Committee. If the House will give the Bill a Second Reading, I believe that in Committee upstairs necessary alterations can be made. No Bill has ever received a Second Reading which did not receive and did not require alteration. [HON. MEMBERS: "Oh!"] Well, I do not know of any. I do, however, know that certain Bills have received a great deal of opposition upstairs which was not legitimate. I will not say anything further on that point lest it should be thought that I am making a personal attack. I hope the Bill will be read a Second time, that we shall be enabled to make the necessary Amendments in Committee, and that later on we shall be able to pass it into law.

Mr. CHARLETON: In supporting the Amendment I agree with the description of this Bill by the Leader of the Opposition, when he described it as pettifogging. I do not think we need go very far for the explanation. I noticed when the ballot was taking place for private Members' Bills how assiduous the Whips of the Government had to be in order to usher, I will not say urge, their supporters into the Lobby to sign the book, and with what reluctance they went, for fear they might get a prize. Having listened to the Mover and Seconder of the Second Reading, it struck me that they did not seem to be very eager. They did not seem to have any zeal for the job. They were heroes because they were cowards in a sense. Of course, I do not mean to say that they are cowards, really.
The Mover of the Amendment spoke of the honesty of private Members anxious to do something for their country on a Friday. We all agree as to their honesty, but I cannot agree with the statement that they are in earnest. They did not show their earnestness. It seems to me that they show the same sort of bravery which Bernard Shaw illustrates in one of his plays. The House will remember that in one of his plays he depicts a gallant soldier who came back and induced an unsophisticated lady to believe that he alone had led a charge on some guns in a most gallant fashion and that he had captured the guns. She believed that, until she was disillusioned. She then learned that he led the charge because the horse ran away with him, and he took the guns because they were lorded with the wrong ammunition and could not fire. These hon. Members are really gallant because they have been forced to do it. There, we find the reason for the very slovenly character of the Bill Criticism on that point has come from the supporters of the Bill on the other side of the House. Hon. Members opposite always tell us how they desire to uphold this glorious Constitution, and the freedom of the individual. They point with scorn to Members on this side and say that we wish to pull down or alter the Constitution, and restrict the freedom of the individual.
Here, we have a Bill which is aiming at the right of combination, but when
we study the lists of shareholders in all the great firms, we find that they support the right of combination and practice it. I have never made a bid for anything at an auction, although I have been to auctions once or twice to see what goes on. I am a simple Cockney. Suppose, like Mary I wanted to have a little lamb. Suppose I wanted a pet lamb, to lead about with me, and suppose a number of my friends whom I consulted knew nothing about lambs, and I knew nothing about lambs. Therefore, we engage the hon. Member for Stone (Mr. Lamb) who does know something about lambs, to bid at an auction. It seems to me that in so doing we should be compounding a felony, although we should be doing what we were entitled to do in order to get a good bargain in buying the lamb. Knowing nothing about the price of lambs, the farmer might get an extortionate price out of us, whereas the hon. Member far Stone, knowing all about the prices of lambs, would be able to help. If we engaged him to bid for us, and gave him a percentage on his achievement, I do not see that that ought to be made a felony, and yet this Bill would seek to do that. There is never any disapproval expressed on the other side of the House as to the action of trusts. They are always silent about that subject. Having regard to the views of the bulk of hon. Members opposite on the question of trusts, this Bill almost amounts to sedition. It is seeking to make illegal that by which so many of them live.
With respect to Clause 2, I ask the House to consider what possible value it can have. The people who send their goods to auction rooms do so for the purpose of selling them. Is it likely that they will want their goods back if they are bought by a ring? If they desire so to do, they can protect themselves by having a reserve price. I do not understand anything about auctioneering, but I understand that so long as it is not a sale in bankruptcy anyone can put a reserve price on the goods.

Colonel VAUGHAN-MORGAN: It is only the vendor who can put on a reserve price.

Mr. CHARLETON: He is the man who is selling the goods.

Colonel VAUGHAN-MORGAN: You said "anybody."

Mr. CHARLETON: I mean the owner of the goods. He can put on a reserve price, I suppose the auctioneer cannot put on a reserve price. The Auctioneers' Society is concerned in prices being forced up, and they object to rings buying cheaply because that affects the amount of their remuneration. Why do people send goods to auction, and why do people go to auctions? I suppose it is to take advantage of the market, or because they want to sell quickly.

Notice taken that 40 Members were not present; House counted; and 40 Members being present—

Mr. CHARLETON: I was about to observe that when people have goods to sell, they are not compelled to send them to auction. It has been pointed out by hon. Members supporting the Bill that because rings combine to buy commodities cheaply at auctions, and then sell them in the open market at enhanced prices, it is wrong. What I do not understand is why, if a ring can purchase goods at auction at less than the real value, they should not dispose of them at the market price, whatever it may be. The hon. Member for Stone poured discredit on that being done. I would remind him that it is one of the most priceless tenets of the people on this side, to take advantage of the market, and then to talk about economic law. If a ring of a few men can buy cheaply and sell the goods afterwards to the ordinary purchaser at the proper market price, why cannot the farmer also sell his goods at the market price, without taking the risk of sending them to auction, having to pay the auctioneer, and running the risk of the goods being sold at very much below the real price.

Mr. LAMB: If a butcher had to travel, say, 100 miles to purchase his requirements, he would find his overhead charges en much increased that the public would have to pay more. It is in his interest for the auctioneers to collect the produce together for him to buy.

Mr. CHARLETON: I suppose it depends upon what the particular market is. The London butcher does no such thing. He goes to Smithfield, and he
says to the dealer, "I want mutton, or meat." The dealer says, "The price is so much," and he has to give the price. If there is anything wrong in the system we ought not to have this Bill but we ought to set about doing away with auctioneering altogether. The supporters of the Bill say that it will not do away with all the evils. In that case it is rather an unworthy Bill. I cannot accept the view that this Measure is aimed at the protection of the public. All the speeches in its favour go to show that it is aimed at protecting the auctioneer rather than anybody else; and perhaps the vendor. The hon. Member for Kings Lynn (Lord Fermoy) spoke of the unfair earnings of other people, but that seems to me, to quote Bernard Shaw again, another case in which vice has become transformed into virtue, on the part of hon. Members opposite. It is not the man who works at a trade or profession who becomes rich. Complaints have been made of the lack of free competition. Society, as organised to-day, tends towards that end. There is the Steel Trust, the big five of the banks, the railways, shipping, all tending towards that end, and they are supported by hon. Members opposite. When we introduce Measures to try and stop it there are all sorts of cries about confiscation and other things from hon. Members on the other side. The argument that members of these rings render no public service comes rather badly from hon. Members of the Conservative party. They are the bulwarks of that system. A bulwark is something which holds up a fabric, and the bulwark which holds up this fabric is to be found on the benches opposite.
It has been said that you can drive a coach and horses through an Act of Parliament; you can drive a fleet of motor omnibuses through this Bill, and the sharks who live in this way will know very well how to get through it. It has been suggested that there may be some convictions when members of I he rings fall out with one another. There is a safe way of avoiding that: the members of these rings have only to study the methods of hon. Members opposite, who know how to close up their ranks, and there will never be any fallings out, and no convictions. Then it is said that dealers are forced to join these rings.
There is nothing new in that. Take soap, sewing cotton, tobacco; any shareholder of these concerns will say that it is the finest thing that has ever been done. It is all superficial and artificial for hon. Members opposite, who are themselves concerned in these rings, to come here with their hands on their hearts and tell us of the iniquity of rings. It is really too absurd. The hon. Member for Ripon (Major Hills) is not in the House, I am glad to see, at the moment. Evidently he is endowed with psychic powers, telepathy, and had he lived a few centuries earlier he would have been in danger of the rack and the stake, because in olden days necromancy was punishable. Still he was rather rocky on sociology. He told us that auctioneering was part of the capitalist system, but he must have known that the nomadic tribes were capitalists long before auctioneering came in, and that capitalism will continue long after auctioneering, unless we knock it on the head beforehand. I was rather pleased with the speech of the representative of the Home Office and delighted to hear his arguments against the Bill. But what sort of a Government have we got when a spokesman of the Home Office kills the Bill by his arguments and then proceeds to beseech us to support the Second Reading?

Captain HACKING: Not to support the Bill as at present drafted, but to pass the Second Reading and then amend it in Committee.

Mr. CHARLETON: The Under-Secretary for the Home Office produced arguments against the Bill, showed how its provisions could not, act, yet says that if it went to a Committee, we might lick it into shape. In view of the amount of work that has to be done in this House and the congestion which takes place towards the end of the Session, such a pettyfogging Measure as this ought not to be allowed to go upstairs to block really good legislation which the country wants.

Mr. ALFRED WILLIAMS: Let me first of all stress the point which has already been mentioned—that one way by which an individual can fight these rings is to place a reserve on the goods, whatever they may be. But that is essentially a rich man's privilege. A poor man cannot afford to do it, and
that is one reason why I am very anxious that the Bill should have a Second Reading. The problem is rather different when you consider property and, say pictures, and agricultural produce, but in all cases there is the same handicap on the poorer man. He cannot afford to put on a reserve and he is, therefore beaten by the ring. Take a small local agricultural market. A comparatively well-to-do man puts some bullocks up for sale, but if the bigger dealers not there, then there is a slump in the price from 5s. to 10s. a cwt. I know this from bitter experience. I am able to take my stock back and bring it in another day when there are more buyers present, but the poor man, who has to realise his property, is up against the ring all the time and is beaten every time. He has to let his property go for what it will fetch. That is a genuine grievance and I hope the House will give the Bill a Second Reading.
As to whether it will really deal with the problem, I have not sufficient legal knowledge to say, but I think it will certainly act as a deterrent, particularly in the agricultural markets. I believe that it will help those buyers who are forced into the ring reluctantly, and that it will strengthen them in their resolve to keep out of the rings. It will certainly act as a deterrent. The agricultural witnesses before the Committee that went into the matter certainly corroborated that point of view. There is an admitted grievance to be remedied. If there is weakness in the Bill, surely we should be able to improve the Bill in Committee. Even if the Bill does not cure an evil, it will to some extent, if only a little, help agriculturists in the remoter agricultural areas. At one time in this House a right hon. Gentleman opposite said that agriculture was "the pampered darling of the Tory party.' Personally I would never go so far as to say that, but it seems to me that usually, when a Measure is brought forward to help agriculturists, we on this side support it and hon. Gentleman opposite usually go against it. I believe we have a greater sympathy with agriculture and a greater understanding of the difficulties of agriculturists.

Mr. DEPUTY-SPEAKER: I do not think that agriculture is the subject of debate.

Mr. WILLIAMS: I am sorry if I am out of order. It is because I believe that the Bill will be a small benefit to the farmers and the agriculturists that I ask the House to give it a Second Reading.

Mr. SCURR: I am not always in agreement with my right hon. Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), in what I think are some of his rather exaggerated ideas regarding personal liberty. I think that he very often stands for what be presumes to be individual rights when really he ought to be considering public interest as a whole. On this occasion I find myself in agreement, and I regard his attitude as absolutely right. The House owes a debt to his for having moved the rejection of the Bill. The hon. and gallant Gentleman the Member for Ripon (Major Hills) tried to convey to the House what he thought was in the minds of hon. Members sitting on these benches. He would not state what was in his mind, but he thought there was something in our minds which would lead us all to talk about this Bill. I have been rather interested in watching the course of this Debate. So far we have had 15 speakers. Of those 15, four have spoken from this side of the House, one from the Benches below the Gangway, and 10 have spoken from the other side of the House. If there be a mysterious reason for speaking this afternoon, it must be found on the Benches of the Tory party. Those who have followed the discussion must be impressed with one fact. To use a colloquialism, it sticks out a mile in the speech of the Under-Secretary of State for Home Affairs. In parenthesis let me say that everyone regrets to hear of the indisposition of the Home. Secretary, and hopes that he will soon be back amongst us. Right outside the speech of the Under-Secretary all the time was a criticism of the bad drafting of the Bill.
If hon. Members take advantage of the ballot to introduce a Bill which they think is important, they ought to take care that the Bill is a Bill which will do the thing that they say it should do. Otherwise, after the criticisms that have been offered, not so much on this side as on the other side, and after the speech of the Under-Secretary, it ought to be the duty of the promoters of the Bill to withdraw it and to bring it up at some future
time, after having gone into consultation with all the people who ought to be taken into consultation. First of all, from the criminal side, the Home Office ought to be consulted. I object to the view that an hon. Member can bring in a Bill beginning with the words, "Be it enacted," and then that after the words "as follows" the rest of the Bill does not matter. The rest of the Bill does matter. When we are having a Second Reading discussion we ought to know exactly what it is that we are talking about. An hon. Member opposite said that in his view there was no Measure that received a Second Reading that ought not to go to Committee and ought not to be altered in Committee.

Mr. LAMB: I said there was no Measure that did not receive alteration when it went into Committee.

Mr. SCURR: I accept the correction of my interpretation of what the hon. Member said. Even now I do not think his statement is quite correct, because there are many Government Measures which go through without alteration, especially in Committee upstairs, when the Government desire to avoid a Report stage debate.

Captain HACKING: The hon. Member said that many Bills go forward to Committee upstairs and are not amended, in order to avoid a Report stage. It is essential to have a Report stage downstairs when the Committee stage has been taken upstairs.

Mr. SCURR: If not amended in Committee?

Captain HACKING: If the Bill is taken in Committee of the whole House and there is no amendment made, there is no Report stage.

Mr. SCURR: I accept the correction. Let me return to the Bill. There is one fundamental objection to it, quite apart from the various points which have been raised. I very much object to the idea which is prevalent of constantly making new crimes. When we were a primitive community there was practically only one crime, that of murder, of which notice was taken, but as society gets more complex, or what is termed more civilised, so those concerned with
Government administration seem to turn their attention with ingenuity to the finding of new crimes. The motto seems to be "Let us have a new crime every day." It is a sort of perpetual motion with regard to crime making. Here we are having a new crime made. Having declared what is the crime, if it is right for us to declare that a certain action is a crime, surely we ought to have adequate machinery for dealing with that crime? What does the first Clause state?
Any agreement made with reference to a sale by auction not to bid at the sale in competition with any other person with intent that the property offered for sale shall be afterwards acquired by the persons making the agreement or some or one of them from the purchaser of the property at the sale shall be a criminal offence.
How are we to know that any agreement has been made? If the statements we have heard this morning be correct, these agreements are made in hole-and-corner public houses between crooks in order to defeat the ordinary bidders in an auction room. Is it seriously suggested that, if an agreement of this kind has been made, the parties to the agreement after the transaction is over are going to inform the police authorities? Are we to have an extension of the Home Office system in order to deal with this matter? We have, at the present time, a special department of Scotland Yard which is very active in regard to Communist and other meetings. We have heard of occasions on which people have hidden in pianos in order to hear speeches at political meetings. Are we to understand that there is to be another department of Scotland Yard and that people will be sent round the haunts of persons who are known to frequent auction sales, listening to find out whether agreements of this kind are being entered into, in order to bring the parties concerned under this Measure? When this proposal is looked at from every point of view we find it absurd from beginning to end. The Bill is badly drafted; it does not deal with the evil and I think it is absolutely objectionable that a Bill should be introduced and discussed in the House which does not, in the main, carry out the ideas supposed to be embodied in it. That is one of the most important features in connection with this Bill. We have always under-
stood that while a Committee of this House can change the details of a Bill it ought not to alter the idea underlying a Bill. Yet even those who are responsible for this Bill admit that it does not get at the people at whom they want to get. They want the matter to be hammered out in Committee. I suggest they should have hammered it out before coming to the House and that they have been trifling with the time of the House by introducing it this afternoon.

2.0 p.m.

Mr. HARDIE: The speeches which have been made to-day in support of this Bill are very misleading. Every speaker seems to have had it in his mind that there is something wrong, but when one reads the Bill it is impossible to see how the Bill is going to put right anything which at present is considered to be wrong. What is contained in this Bill to prevent any two or more individuals coming to an agreement about bidding at an auction? One of those individuals then appears at the auction and buys, and the others, by paying him a fractional profit, can remain outside the Bill altogether. If they only give a farthing or one-eighth of a penny of profit it takes them outside the scope of the Bill, and I ask hon. Members to consider that point very carefully. I had hoped that some of the speakers would have brought into the Debate the real inference of the auction sale. I had hoped that the hon. Member who spoke on the other side and who said he was an auctioneer would do so. I remember as a boy helping to bring cattle of various kinds down to Ayr to be sold at the market there. There was a famous old auctioneer there who had a long white beard, and I can remember on one occasion being in the market very early and having a conversation with him. I said to him, "You will be selling single heads of cattle to-day; how are you going to tell the proper price of all these different sizes and kinds of cattle?" He said to me, "Ah, that is the business of the auctioneer," and stroking his long white beard, he added, "It is a matter of the cunning of the seller and the simplicity of the buyer." It is that simplicity which is being played upon by these practices of which the promoters of the Bill complain, bat the Bill cannot stop these forms of combination. The hon. Member for Stone (Mr. Lamb)
brought in the question of art, and gave the House a very good illustration. He might have gone further, and he might have shown that, apart from the auction room altogether, there is an organised system in this country of dealing with such matters. For instance, in regard to etchings, there is an organisation which buys up a certain number of etchings, gets the original plate and breaks it, and then the whole of these etchings are sold in countries where they fetch very big prices. If you are going to deal with this kind of thing at all, you ought to have some Measure which will be general. The hon. Member for North Cornwall (Mr. A. Williams) gave an illustration of bringing cattle into a market where the price went down by 10s. per cwt. He did not explain whether, if he had been compelled to sell those cattle, as the poor man would be, the consumer would have got the benefit of that 10s.

Mr. WILLIAMS: No. Repeated experience has shown that the consumer gets no benefit. The butchers get the benefit.

Mr. HARDIE: That is the answer I desired. I think it is the true one and from practical experience in buying I know that to be the case. That shows another weakness in the effort which is being made in this Bill to deal with such matters. As I have shown, the Bill cannot stop such things because, wherever a man makes some little additional profit, he is outside the Bill and it may be so small as to be practically nothing. Price as determined by purchasing power, has to be considered. An hon. Member has said that price is determined by the people who turn up in the market to buy and the hon. Member for Stone said that agricultural produce was more subject to market conditions than anything else. I accept that, because where you have perishable goods you have either to dump them or sell them, but the promoters of this Bill would have been better advised if they had sought to bring in a Measure dealing with this kind of thing the whole way through. I can understand the argument that if a man is compelled to take 10s. per cwt. less for his cattle, that reduces the amount by which such a man could increase the wages of those working
for him, but just as we have been told that the consumer does not get that 10s. so we have no indication that it is going to increase wages. Those are two points to be considered. If hon. Members opposite will follow this thing out a little more closely, they will see that what they are really demanding or desiring, although they do not put it in this Bill, is the organisation of distribution, because when a speech was made from this side recently, asking why the farmer could not get what he had to sell direct to the distributing centre, it was replied that he could not travel a hundred miles to do so. But that is only a question of organisation. Buying and selling are no part of the organisation of distribution.

Mr. LAMB: Auctions are organised collecting.

Mr. HARDIE: Not primarily, not for distribution. They are simply there for sale. Why need we have these things going on outside, in that radius? Why not come to the central market? Why should there not be a central market? The hon. Member for Stone referred to the Motion moved from this side of the House not long ago in connection with coal, but he seems to have misunderstood it. What we were advocating was the co-operative distribution of coal to cut out the kind of thing with which this Bill is supposed to deal. You cannot have it both ways. You have either to admit that the one side is right or that the other is wrong, and I am sure that if hon. Members opposite understood as clearly as we do, we who are connected more with the consumers of the articles that are being spoken of, they would understand that they would get the support of the consumer the moment they tried to establish this direct and central co-operative marketing. That is the one way out. If you want to get rid of this supposed double dealing, you can only do it by having your real, central organisations, where there is no possibility of that kind of thing being done. Some people seem to forget, when this kind of question comes up in this House, that we are dealing with a system of society in which it pays a man to do a thing which is wrong.
That is what you are all fighting against in this House, and yet you sneer at this side because of its Socialism.

Mr. DEPUTY-SPEAKER (Mr. James Hope): The hon. Member would not be in order in dealing with the wide question of the regeneration of society.

Mr. HARDIE: If we can get the regeneration of the seller and of the people in the markets, we shall have the basis for a reconstruction of society. You seek to prevent people taking advantage, but as long as you have a system that makes it possible for a man to become richer because he does wrong, yon are going to have the perpetration of that wrong. If you wanted to destroy what you are complaining about this morning, you would stop the method whereby it profits a man to do a wrong thing to another, and that could be done in a Bill. If hon. Members like to take this Bill back, I will come and help them in drawing up the other Bill.

Mr. LAMB: Go on the Committee.

Mr. HARDIE: There is no need to go on the Committee. Such a Bill would go right through the House. On the question of distribution, there is another side that can react, and that is that where you find out that you gee not getting the prices you want, you reduce the quantity coming into the market, so as to raise the price by scarcity. That is also a vicious side of the present system. People who want to deal honestly go to market, and they find that they are not being honestly dealt with.

Mr. WILLIAMS: Restricting output.

Mr. HARDIE: Yes, but that is what is done. I am surprised that men who are so skilled in their own trade as are the farmers, or the Grass Trust as I call them, should have been so careless in drafting this Bill that even the Cockney Member who said he belonged to the City of London said he could see his way to drive a number of motor omnibuses through it. That shows that it is not very closely drawn. I suggest that there is still time to withdraw the Bill and get it put right. If you persist in this Bill, it will be defeated. The common sense of the House will say: "We want some thing done, but we do not want it done
in this stupid way." We, on this side, who want things justly dealt with, who want to see justice as between man and man, stand for justice, but you are not going to make any greater justice by a Bill like this, which, let me repeat for the third time—

Mr. DEPUTY-SPEAKER: I would remind the bon. Member that there is a rule against repetition.

Mr. HARDIE: While I said the third time, I did not mean a repetition. It was only to try and get it to sink in on the other side. That part of the Bill which makes it possible for people to combine and yet get out of the provisions of the Bill is the most serious objection to it.

Major McLEAN: The Debate has shown quite clearly the existence of these knockouts is generally assumed, to put it no higher than that, but the effect is that a portion of the ultimate consideration paid by the ultimate buyer goes, not into the pockets of the vendor, but into the pockets of a number of men who, I contend, have no right at all to it. The argument of the hon. Members opposite is that, while they agree that this is one of the evils of private enterprise, this Bill is doing very little, and not going far enough in remedying those evils. For myself, I would say that if this Bill goes any way and does only a little to remedy that state of affairs, I shall certainly support it. As a matter of fact, I believe it will go a great way. What is the evil that this Bill is designed to meet? I do not think I can do better than refer to the judgment of one of the learned Lord Justices in a case which has been referred to again and again to-day, namely, that of Rawlings. Lord Justice Scrutton said:
The effect (of this agreement) upon the public or the community was that free competition at auctions, affording a ready market for realising goods, was restrained, and the property of any member of the public selling goods might be sold well below its true value.
I believe that is incontestable. I believe these goods again and again are sold far below their real value, and I would like to refer to one case given in evidence before the Select Committee as short time ago. Mr. Hurcomb was a member of a ring, and as a member of a ring he purchased at an auction in the neighbour-
hood of Covent Garden a ruby ring for 12s. Then the knock-out took place. The ring was sold at a profit of £112. Members of the ring shared the £112 between them, and the original holder of the ring got 12s. Is that the kind of thing we are asked to support? It is a real wrong,_ and if we can do anything, as I believe-we shall in this Bill, to put that wrong right, it is our duty to do it. As another Lord Justice said in that case, the the law is quite clear, and it has been laid down for a long time, but—
if the law under modern conditions re quires alteration, it must, I consider, Be altered by the Legislature.
We are adopting that suggestion, and I hope the House will give effect to it. The hon. and learned Member for Cardigan (Mr. Morris), in dealing with the ease of Rawlings, said that if the plaintiff and defendant had not made the agreement they did, it was not clear that the Ministry of Munitions would have got as much as they did for the articles sold. How could he or anyone know, if that agreement had not been made, that the two Members who came to that agreement would not have bid against each other for that article? The Leader of the Opposition referred to the question of upset prices or reserves, and he said there was a remedy open to the subject. I agree in some cases it is so but there are many cases where it is not possible for the vendor to put on a reserve. Take the case of a farmer who has fatted his cattle and sent them down to market. He is bound to dispose of those cattle; he does not want them back on his farm again. Then take the case of a widow of a merchant selling up as the result of the death of her husband. She is, practically speaking, bound to dispose of the business and goods for anything she can get for them, and to say, as the Labour party are saying to-day, that we do not care very much about that widow, but that members of the ring should have something to divide amongst themselves—

Mr. A. V. ALEXANDER: Nonsense!

Major MACLEAN: Is not that the effect of the opposition to this Bill? I believe this Bill will do something to stop that, and I hope that the House will unite in giving a Second Reading to the Bill.

Mr. THURTLE: It is very significant that of all those who have spoken from either side of the House, apart from the Mover and Seconder of this Bill, none has been whole-heartedly in favour of it. Some qualification has been made in each case, and I have never heard a Bill so thoroughly dammed with faint praise by its supporters as this particular Bill has been. The hon. Member who spoke last, and many other hon. Members, have suggested that we on this side of the House are indifferent to evils which exist in auction rooms. That is entirely untrue. We are just as conscious as they are of the fact that evils do exist in connection with auctions, and we want to get those evils remedied; in fact, we on this side want to get all evils done away with. But the difficulty is that we do not agree as to the particular method which is advised in this case. We do not think that a Bill such as this is the proper way of dealing with the evil which exists in connection with auction rooms.
There is a very bad tendency on the part, of this House at the present time to increase the catalogue of crimes. Some of us who have a certain amount of regard for personal liberty resist that tendency very strongly. Only two or three nights ago in this House there was a proposal to make it a crime if a coster were to sell an apple, pear or cabbage off his harrow. A week ago we were discussing a proposal which would have made it a crime if some benevolent person in France, Germany, Russia or the United States were to send over to this country a small contribution to help the suffering women and children of those who are engaged in an industrial dispute. Now this afternoon we want to make it a crime for a man to go to his friends and say, "Look here, there is an auction coming off on such-and-such a date. I am particularly interested in getting an article in it, and I want you to agree not to bid for that article." You are going actually to make that very simple, friendly request a crime. I am glad to notice one thing in connection with this Bill, and that is that the lawyers themselves do not seem to be particularly enthusiastic about it. I have not got a very high opinion of lawyers. I think they regard law much
as the leather merchant regards leather. They say there is nothing like Jaw, and the more laws this country gets—

Mr. DEPUTY - SPEAKER: Had I allowed that line of argument, I should have to allow an answer to the hon. Member.

Mr. THURTLE: Well, I should be very glad to hear an answer. There has been a good deal of damaging criticism of this Bill in the course of this Debate, and we should like to hear much more from those Members who are backing it as to what they have got to say in reply to that criticism. But the point I was going to make was that, rapacious though the lawyers be, and anxious though they are to have an increased number of laws in order to increase their possibilities of business, even they draw the line somewhere. I have looked at this Bill with a great deal of interest, and at the backers of it, and, as far as I can see, not a single backer is connected with the law. It seems, therefore, that the lawyers themselves do not regard this Bill as one which justifies their support and I am going to set that down to the virtue of the legal fraternity.
I would like to meet a point made by an hon. Member opposite, who said that the vendors frequently suffer very much from the operations of these rings, which keep down bidding. The really effective method which the vendor has of protecting himself, either in the case of the ruby mentioned by the hon. Member opposite, or in the case of the bullock, is by putting on a reserve price. If there be a danger of the article going for a price below its intrinsic value, why should not the seller put on a reserve price'? It is natural for a seller to want to get the highest price for his article, but it is equally natural and human for a buyer to want to pay the lowest price.
It has been said that alterations might be made in this Bill in Committee whereby friendly arrangements between private people might be excluded from its operations, but we have to consider the Bill as it stands, and I want to give an illustration of the dangers which beset us. It is a well-known fact that most Members of the Labour party in this House live within the shadow of the Bankruptcy Court. We all have very slender resources upon which to fall
back. My right hon. Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) reminds me that that condition is changing slowly, and that we occasionally get into our ranks people who may not be within the shadow of the Bankruptcy Court, but still, at the present time, it does stand as being a fairly general description of our party that we are a somewhat impecunious body of legislators. I envisage the possibility of one of my Labour friends making an impassioned speech in some part of the country and of a somewhat vindictive Home Secretary—I am not saying anything at all about the present Home Secretary—taking proceedings against him—

Notice taken, that 40 Members were not present; House counted; and 40 Members being present—

Mr. THURTLE: I was saying when this unfortunate interruption took place, due to the lack of interest in this Bill on the part of hon. Members opposite, that a hypothetically vindictive Home Secretary might take proceedings against a Labour Member of Parliament and that the latter might be fined what to him would be quite a large sum. Owing to the straitened circumstances in which most of us on these benches are, that hon. Member would be unable to find the money and would be involved finally in bankruptcy. All his realisable assets would be taken, and we should have the pathetic spectacle of all his household gods being offered at auction. might have amongst them an article which he particularly treasured, and he might go to the auctioneer and appeal to him, in the words of the pathetic old ballad which used to be familiar to me, "Don't put my father's picture up for sale." The auctioneer would say, "I regret it very much, but every available asset has to be realised; the sale must proceed." The man would go round to his friends, and possibly would find one who would undertake to bid for this particular picture. Then he would go to others of his friends who were going to the auction and would say, "Look here, old man, I want to try to get that picture of my father bought in for me, and I do not want you to go and bid up for it." His friend would say, "Very well, I won't," and three or four others of his friends would say exactly the same thing. That
would be a conspiracy; people would be combining to prevent free and legitimate bidding. The picture might be knocked down to my friend's friend, and if this arrangement were then discovered action would be taken against him and he would be fined £100 and might be given six months' imprisonment; and that would not be the end of it, because the sale would be declared null and void and he would lose his father's picture. I submit that is a perfectly legitimate example of the kind of thing which might happen if this Bill became law.
If there be one evil more than another in connection with auctions, it is the evil of "boosting up" prices against honest buyers. There are many dummy buyers in all auction crowds, whose function is to make bids not because they want to make a legitimate purchase for themselves, but in order to force up the price which some legitimate buyer will have to pay. There is no provision at all for dealing with that kind of thing in this Bill. It is a lopsided proposal, and I do not think the House ought to countenance it for one moment. Before we pass a Bill which is going to make a new crime, there ought to be a complete and overwhelming case made out in favour of it. I submit that there has been no case at all made out in favour of this Bill, and it is because I think it is entirely unnecessary, and will fail to deal effectively with the evil which it pretends to remedy, and because as a libertarian I hate unnecessary laws, I am going to oppose this Bill.

Mr. A. V. ALEXANDER: I intervene in this Debate in order to state my views in regard to the general problem of dealing with trade combinations and price fixing associations. I am rather surprised to find the hon. and gallant Member for Ripon (Major Hills) supporting this Bill. If he is in favour of the principle, I take it he will be in favour of any Bill in principle which seeks to restrain abuses set up by trade combinations and price fixing associations. The hon. and gallant Gentleman was the Chairman of the Departmental Committee appointed to make inquiries with the idea of restraining abuses of this kind, and I had to sign a Minority Report issued by the Committee of which he was the Chairman. I did so because I felt that we had not sufficient legislative powers to restrain abuses in trade. Therefore, this is rather
a helpful admission for the hon. and gallant Member to make. I suppose he will now be prepared to support legislation to interfere, not with rings of this kind but rings which raise the price of building material.

Major HILLS: Any proper Measure will receive my unqualified support.

Mr. ALEXANDER: Another point I want to make quite clear is that, leaving aside all questions of personal liberty, which have been so eloquently put forward this afternoon, there is also a question which any responsible Government must keep in mind, and it is that if they are going to deal with abuses of this kind against the community it is iniquitous to proceed by legislation of a specialised character. In America nothing worse has grown up in American law and practice than the legislation introduced of a specialised character. If there is any necessity to deal with restraint of trade or the forestalling of trade it is surely necessary to proceed by means of a general measure which would protect any citizen in the community, and it ought not to be applied against a particular class. I think we should be lacking in our duty if we gave our consent to a Bill which is dealing with this question in that particular way.
I would like to point out that the Government themselves have given a pledge since the last election that the general abuse of trade combinations would be dealt with if necessary. Therefore it is quite an invidious thing after the election to introduce a Bill dealing with the protection of abuses. I remember the great victory meeting of the Tory party after the last general election at which a statement was made welcoming young and competent members who would help the party to cut through the jungle of vested interests. If there is any vested interest in the restraint of trade it is to be found in the large combinations in industry which are used to raise prices to the community in a way which gives them no possibility of securing any redress. The Government know perfectly well from inside deliberations that, if they are going to deal with vested
interests of that character, they ought to bring in a genera Bill. They have plenty of precedents before them.
I would like to call the attention of the Under-Secretary of State for the Home Department to the fact that in 1925 several of my hon. Friends introduced a general Bill to deal with trusts and combines and to restrain abuses thereof. It is true we were able to get a Second Reading for that Measure, but the Government took jolly good care that they would not allow us to get any further with the Measure which would have dealt with any combination of this character in a most effective way. If the Government want to deal with the problem of the agricultural producer who is so much affected by the knock-out ring, let them take a leaf out of the Statute Book of Canada. In that country ever since 1923 they have had the Combines Investigation Act in operation under which the very kind of practice complained of in this Bill is dealt with, and that Measure also gives power to interfere with any other class of combination which is to the detriment of the consumer. Consequently, there is plenty of precedents on which a properly drawn Measure dealing with the whole problem could be based. I think it is perfectly futile for the House to give a Second Reading this afternoon to a Bill which is trying to deal with abuses which we do not deny in this way, and in such an imperfect manner that the, innocent will always suffer with the guilty.
I will put a case in point. I can speak with some authority for the greatest consumers' organisation in the world. We have over 5,000,000 members and in our international organisation we have 50,000,000 members. We are very often engaged in purchasing under the hammer the class of goods in which the hon. Member for Stone (Mr. Lamb) is so much interested. Under this Bill, if those organisations whose object is to protect the interest of the consumer were to agree that they would not bid to raise prices against their own consumers, it would be criminal, although they would only be performing their normal function as a consumers' organisation to protect the general consumers' interest. There could be nothing more stupid or futile than to introduce a Bill of that kind which would have the effect of making
law-abiding citizens into criminals. If you want to deal with abuses of this kind you must introduce a Bill which leaves the investigation to be made by the responsible Government department, and they should be responsible for any legal proceedings taken in restraint of the abuse. To put into the hands of the common informer the power to bring per-sops to a criminal trial as is provided for

in this Bill, is a complete abuse of the use of private Member's time, and I hope the Bill will be rejected.

Lord FERMOY rose in his place, and claimed to move, "That the Question he now put."

Question put, "That the Question be now put."

The House divided: Ayes, 100; Noes, 73.

Division No. 22.]
AYES.
[2.45 p.m.


Albery, Irving James
Gunston, Captain D. W.
Remnant, Sir James


Alexander, Sir Wm. (Glasgow, Cent'l)
Hacking, Captain Douglas H.
Rhys, Hon. C. A. U.


Applin, Colonel R. V. K.
Hartington, Marquess of
Roberts, E. H. G. (Flint)


Berry, Sir George
Henderson, Capt. R. R. (Oxf'd, Henley)
Ropner, Major L.


Bourne, Captain Robert Croft
Heneage, Lieut.-Col. Arthur P.
Rye, F. G.


Bowyer, Captain G. E. W.
Hills, Major John Waller
Salmon, Major I.


Brass, Captain W.
Holland, Sir Arthur
Sandeman, A. Stewart


Briscoe, Richard George
Hopkins, J. W. W.
Savery, S. S.


Buckingham, Sir H.
Hopkinson, Sir A. (Eng. Universities)
Shaw, Lt.-Col. A. D. Mel. (Rentrew. W)


Burton, Colonel H. W.
Hudson, Capt. A. U. M.(Hackney, N.)
Sheffield, Sir Berkeley


Cadogan, Major Hon. Edward
Hudson, R. S. (Cumberl'nd, Whiteh'n)
Sinclair, Col. T. (Queen's Univ., Ballast)


Campbell, E. T.
Hurst, Gerald B.
Smith-Carington, Neville W.


Carver, Major W. H.
James, Lieut-Colonel Hon. Cuthbert
Smithers, Waldron


Cassels, J. D.
Kennedy, A. R. (Preston)
Stott, Lieut.-Colonel W. H.


Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)
King, Captain Henry Douglas
Sueter, Rear-Admiral Murray Fraser


Clarry, Reginald George
Lamb, J. Q.
Thomson, F. C. (Aberdeen, S.)


Cobb, Sir Cyril
Lougher, L.
Tinne, J. A.


Colfox, Major Wm. Phillips
Luce, Maj.-Gen. Sir Richard Harman
Titchfield, Major the Marquess of


Cope, Major William
Lumley, L. R.
Vaughan-Morgan, Col. K. P.


Courthope, Colonel Sir G. L.
McDonnell, Colonel Hon. Angus
Ward, Lt.-Col. A. L. (Kingston-on-Hull)


Craig, Ernest (Chester, Crewe)
Macintyre, Ian
Warner, Brigadier-General W. W.


Crookshank. cpt. H. (Lindsey, Gainsbro)
McLean, Major A.
Wells, S. R.


Davies, Dr. Vernon
Macnaghten, Hon. Sir Malcolm
White, Lieut.-Col. Sir G. Dalrymple-


Dawson, Sir Philip
Marriott, Sir J. A. R.
Williams, A. M. (Cornwall, Northern)


England, Colonel A.
Moore, Sir Newton J.
Williams, Herbert G. (Reading)


Erskine, Lord (Somerset, Weston-s.-M.)
Murchison, Sir C. K.
Windsor-Clive, Lieut.-Colonel George


Everard, w. Lindsay
Newman, Sir R. H. S. D. L. (Exeter)
Wise, Sir Fredric


Fanshawe Commander G. D.
Nuttall, Ellis
Womersley, W. J.


Forestier-Walker, sir L.
O'Neill, Major Rt. Hon. Hugh
Wood, B. C. (Somerset, Bridgwater)


Foxcroft, Captain C. T.
Pennefather, Sir John
Wood, E. (Chest'r, Stalyb'ge & Hyde)


Fraser, Captain Ian
Penny, Frederick George



Fremantle, Lieut.-Colonel Francis E.
Percy, Lord Eustace (Hastings)
TELLERS FOR THE AYES.—


Gadie, Lieut.-Col. Anthony
Peto, Sir Basil E. (Devon, Barnstaple)
Lord Fermoy and Sir Douglas Newton.


Gates, Percy
Pitcher, G.



Goff, Sir Park
Remer, J. R.





NOES.


Adamson, W. M. (Staff., Cannock)
John, William (Rhondda, West)
Salter, Dr. Alfred


Alexander, A. V. (Sheffield, Hillsbro')
Jones, Morgan (Caerphilly)
Scryrngeour, E.


Ammon, Charles George
Kelly, W. T,
Shepherd, Arthur Lewis


Baker, J. (Wolverhampton, Bliston)
Kennedy, T.
Shiels, Dr. Drummond


Barker, G. (Monmouth, Abertillery)
Kenworthy, Lt.-Com. Hon. Joseph M.
Short, Alfred (Wednesbury)


Barnes, A.
Lansbury, George
Sitch, Charles H.


Ban, J.
Lawrence, Susan
Smith, Ben (Bermondsey, Rotherhithe)


Batey, Joseph
Lee, F.
Smith, H. B. Lees (Keighley)


Beckett, John (Gateshead)
Lindley, F. W.
Smith, Rennie (Penistone)


Bondfield, Margaret
Livingstone, A. M.
Snell, Harry


Broad, F. A.
Lowth, T.
Spoor, Rt. Hon. Benjamin Charles


Charleton, H. C.
Lunn, William
Thomas, Sir Robert John (Anglesey)


Cluse, W. S.
MacDonald, Rt. Hon. J. B. (Aberavon)
Thorne, G. R. (Wolverhampton, E.)


Crawfurd, H. E.
March, S.
Thorne, W. (West Ham, Plaistow)


Dalton, Hugh
Mitchell, E. Rosslyn (Paisley)
Thurtle, Ernest


Day, Colonel Harry
Montague, Frederick
Viant, S. P.


Duncan, C.
Morris, R. H.
Walsh, Rt. Hon. Stephen


Edwards, C. (Monmouth, Bedwellty)
Mosley, Oswald
Webb, Rt. Hon. Sidney


Fenby, T. D.
Naylor, T. E.
Wedgwood, Rt. Hon. Josiah


Garro-Jones, Captain G. M.
Owen, Major G.
Whiteley, W.


Hamilton, Sir R. (Orkney & Shetland)
Palin, John Henry
Wilson, C. H. (Sheffield, Attercliffe)


Hardie, George D.
Parkinson, John Allen (Wigan)
Wilson, R. J. (Jarrow)


Hayday, Arthur
Pethick-Lawrence, F. W.
Wright, w.


Hayes, John Henry
Potts, John S.



Henderson, Right Hon. A. (Burnley)
Roberts, Rt. Hon. F. O. (W. Bromwich)
TELLERS FOR THE NOES.—




Mr. Tinker and Mr. Scurr.

Question put accordingly, "That the word 'now' stand part of the Question."

The House divided: Ayes, 107; Noes, 72.

Division No. 23.]
AYES.
[2.54 p.m.


Albery, Irving James
Goff, Sir Park
Peto, Sir Basil E. (Devon, Barnstaple)


Alexander, Sir Wm. (Glasgow, Cent'l)
Gunston, Captain D. W.
Pilcher, G.


Applin, Colonel R. V. K.
Hacking, Captain Douglas H.
Remnant, Sir James


Berry, Sir George
Hartington, Marquess of
Rhys, Hon. C. A. U.


Boothby, R. J. G.
Henderson, Capt. R.R.(Oxf'd, Henley)
Roberts, E. H. G. (Flint)


Bourne, Captain Robert Croft
Heneage, Lieut.-Col. Arthur P.
Ropner, Major L.


Bowyer, Captain G. E. W.
Herbert, Dennis (Hertford, Watford)
Rye, F. G.


Brass, Captain W.
Hills. Major John Waller
Salmon, Major I.


Briscoe, Richard George
Holland, Sir Arthur
Sandeman, A. Stewart


Buckingham, Sir H.
Hopkins, J. W. W.
Savery, S. S.


Burton, Colonel H. W.
Hudson, Capt. A. U. M. (Hackney, N.)
Shaw, Lt.-Col. A. D. McI. (Renfrew, W)


Campbell, E. T.
Hudson, R. S. (Cumberl'nd, Whiteh'n)
Sheffield, Sir Berkeley


Carver, Major W. H.
Hurst, Gerald B.
Sinclair, Col. T.(Queen's Univ., Belfast)


Cassels, J. D.
Hutchison, G. A. Clark (Midl'n & P'bl's)
Smith-Carington, Neville W.


Chamberlain, Rt. Hn. Sir J. A. (Birm., w.)
James, Lieut.-Colonel Hon. Cuthbert
Smithers, Waldron


Charteris, Brigadier-General J.
Kennedy, A. R. (Preston)
Stott, Lieut.-Colonel W. H.


Churchman, Sir Arthur C.
King, Captain Henry Douglas
Sueter, Rear-Admiral Murray Fraser


Clarry, Reginald George
Lamb, J. Q.
Thomson, F. C. (Aberdeen, South)


Cobb, Sir Cyril
Looker, Herbert William
Thorne, G. R. (Wolverhampton, E.)


Colfox, Major Wm. Phillips
Lougher, L.
Tinne, J. A.


Cope, Major William
Luce, Major-Gen. Sir Richard Harman
Titchfield, Major the Marquess of


Courthope, Colonel Sir G. L.
Lumley, L. R.
Vaughan-Morgan, Col. K. P.


Craig, Ernest (Chester, Crewe)
Lynn, Sir R. J.
Ward, Lt.-Col. A. L (Kingston-on-Hull)


Crookshank, Cpt. H. (Lindsey, Gainsbro)
McDonnell, Colonel Hon. Angus
Warner, Brigadier-General W. W.


Davies, Dr. Vernon
MacIntyre, I.
Wells, S. R.


England, Colonel A.
McLean, Major A.
White. Lieut.-Col. Sir G. Dairymple-


Erskine, Lord (Somerset, Weston-s. -M.)
Macnaghten, Hon. Sir Malcolm
williams, A. M. (Cornwall, Northern)


Everard, W. Lindsay
Marriott, Sir J. A. R.
Williams, Herbert G. (Reading)


Fanshawe, Commander G. D.
Moore, Lieut.-Colonel T. C. R. (Ayr)
Windsor-Clive, Lieut.-Colonel George


Fenby, T. D.
Moore, Sir Newton J.
Wise, Sir Fredric


Forestier-Walker, Sir L.
Murchison, Sir C. K.
Womersley, W. J.


Foxcroft, Captain C. T.
Newman, Sir R. H. S. D. L. (Exeter)
Wood, B. C. (Somerset, Bridgwater)


Fraser, Captain Ian
Nuttall, Ellis
Wood, E. Chest'r. stalyb'dge & Hyde)


Fremantle, Lieut-Colonel Francis E.
O'Neill, Major Rt. Hon. Hugh



Gadie, Lieut.-Col. Anthony
Pennefather, Sir John
TELLERS FOR THE AYES.—


Garro-Jones, Captain G. M.
Penny, Frederick George
Lord Fermoy and Sir Douglas


Gates Percy
Percy, Lord Eustace (Hastings)
Newton.




NOES.


Adamson. W. M. (Staff., Cannock)
Jones, Morgan (Caerphilly)
Scrymgeour. E.


Alexander, A. V. (Sheffield, Hillshro')
Kelly, W. T.
Shepherd, Arthur Lewis


Ammon, Charles George
Kennedy, T.
Shiels, Dr. Drummond


Baker, Walter
Kenworthy, Lt.-Com. Hon. Joseph M.
Short. Alfred (Wednesbury)


Barker, G. (Monmouth, Abertillery)
Lansbury, George
Sitch, Charles H.


Barnes, A.
Lawrence, Susan
Smith. Bea (Bermondsey. Rotherhithe)


Barr, J.
Lee, F.
Smith, H. B. Lees- (Keighley)


Batey, Joseph
Lindley, F. W.
Smith, Rennie (Penistone)


Beckett, John (Gateshead)
Livingstone, A. M.
Snell, Harry


Bondfield, Margaret
Lowth, T.
Spoor, Rt Hon. Benjamin Charles


Broad, F. A.
Lunn, William
Stephen, Campbell


Charleton, H. C.
MacDonald, Rt. Hon. J.R.(Aberavon)
Thomas, Sir Robert John (Anglesey)


Cluse, W. S.
March, S.
Thorne, W. (West Ham, Plaistow)


Crawfurd, H. E.
Mitchell, E. Rosslyn (Paisley)
Thurtle, Ernest


Dalton, Hugh
Montague, Frederick
Viant. S. P.


Day, Colonel Harry
Morris, R. H.
Walsh, Rt. Hon. Stephen


Duncan, C.
Mosley, Oswald
Webb, Rt. Hon. Sidney


Edwards, C. (Monmouth, Bedwellty)
Owen, Major G.
Wedgwood, Rt. Hon. Josiah


Hamilton. Sir R. (Orkney & Shetland)
Palin, John Henry
Whiteley, W.


Hardie, George D.
Parkinson, John Allen (Wigan)
Wilson, C. H. (Sheffield, Attercliffe)


Hayday, Arthur
Pethick-Lawrence, f. W.
Wilson, R. J. (Jarrow)


Hayes, John Henry
Potts, John S,
Wright, W.


Henderson, Rt. Hon. A. (Burnley)
Remer, J, R.



Hopkinson, Sir A, (Eng. Universities)
Roberts, Rt. Hon. F. O. (W. Bromwich)
TELLERS FOR THE NOES.—


John, William (Rhondda, West)
Salter, Dr. Alfred
Mr. Tinker and Mr. Scurr.


Bill read a Second time, and committed to a Standing Committee.

LOCAL GOVERNMENT FRANCHISE (EXTENSION TO MERCANTILE CORPORATIONS AND COMPANIES) BILL.

Order for Second Reading read.

Colonel VAUGHAN-MORGAN: I beg to move, "That the Bill be now read a Second time."
For the information of hon. Members I will explain that this Bill has the support of a number of important authorities and bodies. It is supported by the London County Council, the City Corporation, various London Borough Councils, the London Chamber of Commerce, the Federation of British Industries, and the Glasgow Citizens' Union. [Interruption.] I am glad to know that its support is received so favourably by hon. Members on the opposite side of the House. The purpose of the Bill is to qualify limited companies by nominated delegates to exercise their vote in local government elections. It also seeks to qualify the nominated officer to serve on local authorities and therefore in both those respects to confer privileges which do not at the present time exist. The position at the present moment is that there is a great difference between various classes of ratepayers. The individual ratepayer has a vote for local government elections. In the case of a. partnership, the several partners likewise have a vote each, subject to certain qualifications. A limited company, although it may be a large ratepayer in its corporate capacity, has no vote and consequently no voice in local government affairs. It is not, of course, suggested that the local government franchise should be conferred upon each shareholder in a limited company. That would be an absurdity. That is not part of the proposal contained in this Bill. That is where a difference occurs as regards the necessity for the proposals of this Bill so far as local government is concerned, and where the difference lies between the ratepayer and the payer of ordinary Imperial taxation. An anomaly exists at the present time from the point of view to which I have referred.
There are two principles which I think I may invoke in support of the proposals
of the Bill, namely, the principle of equality in representation, that is to say, equality in franchise—a principle which is fairly familiar both in this House and in discussions outside at the present time—and also the constitutional principle that there should be no taxation without representation. I am aware that this is not a question so much of taxation as of payment of rates, and I am familiar with the distinction between rates and taxes; but, nevertheless, the principle applies just as forcibly in local government as it does in national government. In local government we have a smaller rateable area, and, consequently, a greater interest in the small area on the part of each ratepayer. The shareholder in a limited company, who has no voice in the determination of local affairs, and, consequently, in the manner in which his contribution to the rates may be spent, has, in his capacity as a citizen of the State, a voice and usually a vote—in fact, invariably a vote if he is on the Parliamentary register—so far as the determination of national policy and the levying of national taxes are concerned.
We have, moreover, in support of this proposal, certain historical precedents to which I propose to refer. Prior to the year 1894, limited companies were in a position to exercise the vote, certainly in regard to guardians' elections, and, in certain cases, in regard to elections to the vestries. For example, under 59 Geo. III, and under the Poor Law Amendment Act, 1867, they had certain rights in regard to exercising the franchise. That position was altered under the Local Government Act, 1894. Since that time, a number of proposals have been submitted to the House to remedy the existing condition of affairs. A Bill was presented in 1904 to confer the municipal franchise on companies. In October, 1904, the Council of Municipal Corporations passed a resolution in favour of it, and in 1905 a Bill was again introduced into this House. Neither of those Bills was passed. I am not sure whether either of them had a Second Reading, but at any rate neither of them got far. In 1908 a Bill was introduced into the House of Lords by Lord Avebury, and passed by that House, but it did not secure a Second Reading in this House. The subject, therefore, has on several occasions been before this House, and has generally received a favourable
acceptance, although the exigencies of Parliamentary circumstance have not enabled the proposals to be carried into law.
Those attempts at legislation have been followed up. I was fortunate enough to have the opportunity last year of introducing the Bill which I am asking the House to receive to-day, but certain national circumstances involved the necessity on the part of His Majesty's Government for taking all private Members' time, and that Bill could not be introduced. That was unfortunate, but I trust the House will take the opportunity to-day to remedy that misfortune. I have alluded to the difficulties at the present moment, and to the anomalies which exist, as I have pointed out, between an individual, a partnership which may have several votes, and the absolutely unenfranchised condition of limited companies and mercantile corporations. The proposal has the advantage of what I might describe as highly respectable parentage and collateral ancestry. It has been suggested on more than one occasion, and it has even got so far as passing through one House of Parliament, but it has not as yet received the favourable consideration of this House.
The procedure of the Bill is quite simple. The operative part of the first Clause reads:
Where any joint stock or other company has during the whole of the qualifying period occupied as owner or tenant any premises of the value of not less than £25 in a local government electoral area, and is rated in respect of the sonic, an officer of such company shall lie entitled to he registered as a local government elector for such local government area, and he shall be qualified to be elected a member of the local government authority.
Those are the essential words, and they will entitle a limited company both to exercise the vote itself, by its nominated officer, and also qualify that nominated officer, if he so desires, to offer himself for election to the body operating in the local government area. There we have the compliance with the principle, to which I have alluded, of representation combined with taxation. We also afford an opportunity to people skilled in the administration of private affairs and big mercantile undertakings of taking part in the local government of the area with
which they are closely concerned, an advantage to local government which I think this House should highly appreciate.
There are criticisms against this proposal. There are those who think it will go too far and those who think it does not go nearly far enough. The essential moderation of the proposal is one of its features which should commend it in all quarters of the House. It is not suggested that, because a company pays rates, every shareholder should equally share in the franchise of the local government area. Ours is a very moderate suggestion. There are those who think it would put too much power or influence in the hands of a large concern, but that is not sought at We only aim at putting a large ratepayer, who mar happen to be a limited company, in the same position as an individual ratepayer—a very modest proposal. So far as precedents are concerned, I should like to point to the procedure which now obtains in the case of the Port of London Authority. The Act that constituted the Port of London Authority in 1908 permits of the nomination and voting by limited companies. The Bill follows similar lines to those in the operative Sections of that Act, a procedure which previously had received the approval of Parliament in the Belfast Harbour Act, 1883.
A further criticism has been suggested, that advantage might be taken of the Bill to set up limited companies of a fraudulent or non-bonâ fide character with the sole end of what one might describe as manufacturing votes. Thera is no suggestion of that sort, nor is there any substantial inducement. A limited company must be a bonâ fide limited company such as operates under the Joint Stock Acts or applies to the public for subscription or a bonâ fide private limited company which differs only from the others by the fact that it does not appeal for public subscription. In either case there is nothing of the nature of manufacturing votes attempted or intended, and each limited company for which we seek to provide the franchise has to be a ratepayer in the area with an annual rateable qualification of not less than £25. I think that apprehension may be dismissed, There is no danger of anything of the sort, and no
danger that the effect of our proposal would be to provide a gerrymandering of that kind.
I recommend the Bill to the House on the grounds that we desire to remove an anomaly that we desire to put the large ratepayers on an equal footing with the individual or the partnership, and not to deprive them of the franchise just because they are a limited company. To grant the franchise would comply with two accepted principles. The advantage of equalising the franchise, as far as that can reasonably be done, is desirable, because it would be in compliance with the principle of no taxation without representation, because we have precedents for it, and because the grant of the franchise in these circumstances would encourage the nominated representatives of great mercantile and commercial bodies, industrial or otherwise, to take an interest in local affairs, which would be for the public advantage and in the national interest. For these reasons, and having endeavoured to deal with some of the objections that may be raised, I ask the House to give favourable consideration to these proposals.

Sir JOHN PENNEFATHER: I beg to second the Motion. This is a Bill which seems to cue to be so moderate and so reasonable that it must appeal to all those who appreciate reason and moderation. Its general principles and objects have been ably dealt with by my hon. and gallant Friend, and I hope to avoid, as far as possible, repeating anything that he has so well said. I would like to base the claim that this Bill is not only due but overdue, upon some figures which I will quote. These figures, as the House will see, reveal to us that a great change has taken place in this country in recent years in the system and methods by which businesses, large and small, are conducted. This Bill is an attempt to apply up-to-date legislation to the changes which have taken place over a period of years. It may surprise some hon. Members to know that this change in the methods and system of carrying on business is as great as it really is. In 1905, not much more than 20 years ago, which is a short time in the life of a country, the number of limited liability companies in this country
was under 40,000. By 1915 their number had grown to 66,000, and in the last 10 years, that is between 1915 and 1925, the number had grown to the large total of 95,000. That is an extraordinary increase in 20 years. It is art increase of more than double, from 40,000 to 95,000; and an increase of 30,000 in a short period of 10 years. But statistics do not always tell the whole story, and in this case the statistics upon which we can lay our hands certainly do not reveal the full extent of the change in our business system to which I have referred, because not only has the number of companies so largely increased but the great majority of these companies have very largely increased the number of branch premises which they have in different parts of the country. A few years ago it was somewhat unusual for a company to have more than one or two branches. Ten branches, or 20 branches, was considered something very large, but now we have many companies with hundreds of branches spread over the country, and I know of one which has 2,000 branch premises.
If we take the large increase in the number of companies and bear in mind that a large proportion of these companies have so vastly increased the number of their branch premises we can easily see that the number of rate-paying premises which have been disfranchised by the present law must be very large. What happens is this. Premises are opened and if at the end of the name there is the word "Limited" that ipso facto means that no person who pays rates for those premises is entitled to any vote in connection with local government. I do not think anyone can deny that an enormous number of ratepayers in various local areas have been and are being day by day disfranchised by the operation of the law as it exists at present. Let me take two cities with which I am well acquainted as examples. I take Liverpool first; or rather, in order to save the time of the House I will take the two cities together. Take Liverpool and Manchester. The rateable value of the premises owned or occupied by companies in each of these two great cities is roughly one-third of the total rateable value of the city, and as rates are paid on the assessable value it follows that each year these various companies must contribute approximately one-third of the total
amount of the rates that are levied. It seems incredible yet it is the actual case that these company ratepayers, although they contribute roughly one-third of the rates, have no voice whatever in the local management of the areas in which they are situated, although the question as to whether these areas are well governed or badly governed is a matter of the most vital importance.
I do not propose to elaborate that argument at any length, because I think that a mere statement of the fact must carry conviction to any unprejudiced person that it is wrong—I was going to say worse than wrong, that it was absurd and silly —that so many of the larger ratepayers in an area should have no voice whatever in connection with the local Government of that area. The Bill I have ventured to term a very moderate Bill. I think I could support it with even greater enthusiasm if it went further. I wonder whether the House realises how extremely modest the Bill is? I save mentioned that these company ratepayers contribute about one-third of the rates of the area in which they have premises. Logically it might be said that, that being so, they were certainly entitled to one-third of the representation. But this Bill makes no such claim as that. It does not ask for representation in respect of each property of a company in any area. Although a company may pay rates on twenty branches in a certain area, it is only suggested that the company should be entitled to one vote.
I think there has been some misapprehension about the Bill. From casual conversations I have had with hon. Members they seem to think that this will be some great swamping Measure creating a large number of voters in municipal affairs. That is not so. No matter how many branches a company has in a certain area, all that is asked for is that the company in that area should be entitled to one representative. I do not think there is any Member in any part of the House who can think that that is an extravagant or unreasonable proposal. I hope that I have served some purpose in making clear to the House what this Bill really does mean. Logically, perhaps, we would be entitled to ask for the whole loaf. We may be entitled even to
ask for half a loaf, but what we are asking for is not the whole loaf and not the half loaf but merely a few crumbs from the loaf. What would be the effect of this Bill? It would merely be to give a vote to a concern which is possibly the largest ratepayer in its area, which is probably employing a very large proportion of the workers in that area, and which has, perhaps, 50 branches in that area. All we ask is that such an important concern, paying such large sums in rates, so vitally interested in the good management of the district, should have one vote in that area; in other words that it should have no more than the smallest ratepayer in the district. I do not see how moderation could be carried any further. There is an old saying to the effect that those who pay the band are entitled to call the tune. In this case we do not ask to call many of the tunes. All we say is "we pay one-third of the salaries of the band. Do let us have a little voice sometimes as to what tune is to be played."
I do not wish to detain the House but this is an important subject of which I have made some considerable study, and I would like to say a word in particular in regard to private companies. There were on 31st December last 86,000 private companies. In what respect does the private company as a rule differ from the ordinary firm? As a rule it happens that the ordinary firm of several partners may find it, for family or some other good reasons, convenient or advisable to divide its capital into shares. The partners do not go to the public and invite subscriptions; it is purely a private arrangement between the partners or the members of the family concerned and it has its advantages to those concerned. But the change made in the name of, say, Messrs. Brown, Smith & Co., by merely adding the word "Limited" has no prejudicial effect upon the family or upon the company. It is merely a matter private accounts, yet under our existing law, if partners come for good reasons to that very sensible arrangement and form a concern with shares, a private limited concern, the moment they do so and add to the name over the shop or factory or office the little word "Limited," that concern is disfranchised for local government purposes. That seems to be an anomaly.
There is a private firm, let us say, for example, paying £400 a year in rates, cad with four partners, and each of those four partners is at present, as long as the firm have over their door "Brown, Smith, & Company," entitled to a local government vote, but should that business be carried on in exactly the same fashion, by exactly the same men, in exactly the same premises, and paying exactly the same rates, but with the letters "Ltd." added after their name, every one of those four partners is disfranchised. Although the rates continue to be paid, every one of those four partners is disfranchised, and that particular concern, because it is a private company, has no voice whatever in the local government of the area in which it exists.

Lieut.-Commander KENWORTHY: If they live on the premises they have the franchise.

Sir J. PENNEFATHER: That may be so, but I should think it is rarely that they live on the premises, and in any case it is a matter of detail, which does not affect the general principle to which I have referred. The hour is late, and I do not want to go into all these little details.

Lieut.-Commander KENWORTHY: Go on.

Sir J. PENNEFATHER: If the hon. and gallant Member wishes me to enter into all those points, I am afraid I shall deprive him of any opportunity of making the speech which is obviously burning on his lips, but, if I have the hon. and gallant Member's permission to continue a little longer, I want to suggest most strongly and earnestly that conditions that might have involved no great hardship 10 or 20 years ago do to-day involve a very serious hardship. As I am not so Conservative that I always want that things should remain as they are and have been for the last 20 years, as I am progressive, and not reactionary—

Lieut.-Commander KENWORTHY: Come over here!

Sir J. PENNEFATHER: The hon. and gallant Member suggests that, because I am progressive, I should go over there, but I should regard that as a reactionary
step. I very much appreciate the compliment that the hon. and gallant Member has paid me in desiring me to come and strengthen the weakness of his case, but I am getting perhaps too old for that, and—[HON. MEMBERS "No!"] If hon. Members will allow me to finish the sentence, I was going to say that I am getting perhaps too old and too experienced to desire to live in the past, to desire to continue to-day conditions which might have been applicable 20 years ago. That, I should call reactionary. I want to progress and to change our legislation when it can be beneficially changed. This Bill will remove to some extent, but not as far as I would wish, a glaring anomaly and a great injustice. Above all, I would stress the point that this is an extraordinarily moderate demand, because there is the case of the four partners who have become a limited liability company. We do not ask you to give votes to all four, but a vote to one of them.
Therefore, there can be no danger, such as I imagine is apprehended by some hon. Members, that this Bill, if it passes —and I hope it will pass—will create a large number of capitalist electors who will swamp the proletariat. I dare say that will be the cry, but it will be utterly absurd. The number created will not be large, and when we consider to whom these limited companies largely belong, we shall finch that in a large number of cases the capital concerned has been provided by the members of the proletariat. Therefore, I am not putting this from the point of view of the capitalist, or from the party point of view or from the point of view of the employer, but solely on the ground that this would be a wise Act, which would redound to the satisfaction and protection of every class of the community, not excluding the proletariat.

Mr. SCURR: I beg to move, to leave out the word "now," and at the end of the Question to add the words, "upon this day six months."
On the Bill which passed its Second Reading a few moments ago, we had a very good-humoured discussion throughout, and there was no real difference of party between us. It was a difference of individuals in regard to a certain Measure which was proposed, but in
regard to this Bill we are faced with a totally different issue, and although the Mover and the Seconder have tried to put it forward as one of those Measures about which we are all agreed, that it really does not do very much, that it only enfranchises one or two of the more unfortunate joint stock companies, and will not interfere with the proletariat or any persons of that kind, I want to describe this as one of the biggest examples of an attempt at class legislation that has been introduced into this House. [HON MEMBERS: "Oh!"] I, of course, quite expected that note of amusement from the benches opposite. As far as the Conservative party is concerned, its business, as the late Lord George Hamilton said, is to look after its friends, and this afternoon the hon. and gallant Member for East Fulham (Colonel Vaughan-Morgan) has put forward something on behalf of his friends of the limited liability companies. Local government bodies in this country are really the most important factors we have in our life. I suggest that in many ways they are far more important even than this House. After ail, we can only decree what the law shall be, but the administration of a large portion of the law is in the hands of our municipal authorities, and I think it will be agreed that they perform their duties well.
What has been the basis of the franchise for a considerable time? Previous to 1832 it was in every sense of the word a property qualification, but as education has progressed and the economic development of the country has grown it has been found more and more necessary to take into consultation the masses of the people. We no longer base intelligence on property; quite the contrary. We now say that intelligence comes as the result of citizenship, and we have given citizens' privileges to adult males and to a very large number of women, and if the present Government had only kept its pledges there would be a Measure before us now extending the franchise to women at the age of 21. Though that has been the tendency, the hon. Baronet the Member for Kirkdale (Sir S. Pennefather) is assuring us that he is a progressive. If he will permit me to say so without offence, his progressiveness
seems to be like that of the crab, and here he wants to go back to the simple enfranchisement of property.

Sir J. PENNEFATHER: I entirely deny that.

Mr. SCURR: I can only refer the hon. Baronet to the Bill. It confers upon limited liability companies the right to nominate under their seal one person on the company as a local government elector in a particular locality. What is the basis on which a joint stock company is formed. It is formed entirely on the basis of property, and I cannot congratulate the hon. Baronet on his logic if he denies what. I say, that this is in every sense of the word a Bill for the enfranchisement of property.

Sir J. PENNEFATHER: May I point out that at present voting power is based upon the value of the rents paid, so it is based upon property, but that there is disfranchisement when the property is held by a company. Therefore, while the hon. Member finds fault with my logic, I am entitled to find fault with his statement.

Mr. SCURR: My statements are perfectly accurate. I will turn to Clause 1 of the Bill. First of all, it carefully excludes county councils, municipal corporations, or county or metropolitan boroughs from exercising the light to appoint a local government elector. If I understood the argument fro the Bill aright, it is that these joint stock companies have certain ratepayers' rights in their localities which they are not able to exercise; but there are also a large number of municipal corporations which have the same ratepayers' rights. The London County Council, for example, is a very considerable ratepayer in every metropolitan borough, but it is deprived of the right to appoint a voter, although a joint stock company which happened to have ft shop or factory in each one of the metropolitan boroughs would be allowed to vote. Further, all other local government authorities have ratepayers' interests outside. I am the chairman of a board of guardians which has a school in Essex, and we are the largest ratepayers in that parish. Under this proposal we should not be allowed to nominate a person to be a voter in that Division. If the argument of hon. Members opposite
is right that those persons representing private companies who have a particular ratepayers' interest in a locality should have a vote, it also follows that a municipal corporation should have a vote as well. Who is to be the person to exercise this vote. According to this Measure it is to be:
An officer in such company or corporation authorised under its seal.
This seems to be introducing an extraordinary form of procedure into our system of enfranchisement. A company consists of shareholders who subscribe to the various funds of the company, and they are taken from all parts of the country and hold different and varying views in regard to politics. A company is not a body which can come forward and say that it represents the views of the whole of the shareholders. All that is being done here is to concentrate in the hands of certain individuals the right to vote in a locality with which individually they have no concern. This proposal is going to apply to a good many of our industrial districts, and more particularly in London to the East End districts. I know, from personal experience, that in connection with one great limited liability company in the East End of London at the present time, the officers or members of the board of directors have found no difficulty in getting a vote. The Metropolitan Municipal Alliance deals with these matters and a great factor in the control of that body is the firm of Messrs. Bryant and May, and Messrs. It. and H. Green and Silley Weir. For a long time not only did the accountant of Messrs. Bryant and May have a vote in the Poplar Division, but he was a member of the Poplar Borough Council, and he was doing the very thing which the hon. Member who proposed this Bill suggested could not be done at the present time. This was accomplished simply and solely because Messrs. Bryant and May let off a certain proportion of their premises to an accountant, and he became a duly qualified elector of the Metropolitan Borough of Poplar. With regard to the firm of IL and H. Green, I know that Captain Green had a vote. I could give the names of many other firms in this connection, because this thing is done all over the place. If the
persons who are really interested in the locality think it worth their while, they will take care that they get the vote.
The hon. and gallant Member who introduced this Bill put forward the analogy of the Port of London Authority, but I think that analogy is incorrect. That, authority after all is a body concerned only with a purely commercial enterprise. As a matter of fact, it is running a big commercial enterprise. The dock and wharf services of London cannot be run successfully entirely under private enterprise, and so, of course, a public body has been called into being. The wharfingers and others have the right to elect the largest proportion of the members of the Port of London Authority, hut they are there concerned entirely with their business as a port and harbour authority. They are not concerned with Local Government questions.

Colonel VAUGHAN-MORGAN: The analogy is true to the extent that they fix the tolls.

Mr. SCURR: They are entirely concerned with administering a port and harbour authority. What is the interest of these particular companies in the public health service or in the housing question which local government bodies are called upon to administer?

Mr. DENNIS HERBERT: Very large.

Mr. SCURR: I know a good many companies who are anxious that there should be a fine system of transport in their area, and they do not mind how much is paid out of the rates for that purpose, but they have a strong objection when it is a question of paying public money that is going to benefit the poorer sections of the community. [HON. MEMBERS: "No!"] They have a very strong objection to paying money out of the rates on behalf of child welfare and maternity welfare. [Hon. MEMBERS: "No!"] They have a very strong objection to anything which is going to benefit persons who are down and out and who are the poorest members of the community. [HON. MEMBERS: "No!"] We know that there are other tentative proposals in the air with regard to Poor Law reform, underlying which there is exactly the same principle. Poorer persons do not matter. We are to concern ourselves with these great powerful com-
panies which exist at the present time. They are the big ratepayers, and they are the people who have to be consulted on all these things. The unfortunate individual who has to live under conditions which very often have been largely produced by the mismanagement of many of these companies are to be still further handicapped by having the dice loaded against them in regard to votes for a municipal corporation.
I said at the beginning that this was one of the greatest pieces of class legislation that has ever been introduced. It is really an attempt to say that money's worth is to be the deciding factor in regard to the organisation of the work of citizenship of this country. [HON. MEMBERS: "No!'] Hon. Members differ, but they cannot get away from the Bill and from the effect of the Bill. What will be the result directly? Supposing this Bill passes into law and we have only one person in each company entitled to be enrolled as a local government voter, what is going to follow? In a little while we shall have them saying, "This company, which has only £1,000 capital, has one vote and that company, which has £5,000,000 capital also has
only one vote. Is that fair? I can give an illustration. Bryant and May are rated in the Parish of Poplar at £6,500 and there is a small limited liability company which is rated only at £50. According to the hon. and gallant Member, there would be simply one vote given to each of these limited liability companies. But later on we shall have them coming and saying that they require votes in proportion to the rateable value, and, once you have passed the principle of this Bill I can see no logical reason for refusing such a demand.
It being four of the Clock, the Debate stood adjourned.

Debate to be resumed upon Monday next.

The remaining Orders were read, and postponed.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.

Adjourned at One Minute after Four o'Clock, until Monday next (28th February).